Document of The World Bank Public Disclosure Authorized Report No.: 20986 CD

PROJECT APPRAISAL DOCUMENT

Public Disclosure Authorized ONA

PROPOSED CREDIT

IN THE AMOUNT OF SDR 50.8 MILLION (US$67 MILLION EQUIVALENT)

TO THE

REPUBLIC OF CHAD

FOR THE Public Disclosure Authorized NATIONAL TRANSPORT PROGRAM SUPPORT PROJECT

September 29, 2000

Public Disclosure Authorized TransportGroup (AFTTR) Centraland WesternAfrica Africa Region CURRENCY EQUIVALENTS

(as of August 17, 2000)

Currency Unit = FCFA FCFA 720 = US$ 1.00 US$0.138 = 100 FCFA

BORROWER'S FISCAL YEAR: January 1 - December 31

ABBREVIATIONS AND ACRONYMS

AFD Agence Fran,aise de Developpement AfDB African Development Bank CAER Compte Autonome d'Entretien Routier CAS Country Assistance Strategy CISCP Cellule Intenninisterielle de Suivi et Coordination des Projets DR Direction des Routes DTS Direction des Transports de Surface DEP Direction des Etudes et de la Programmation EU European Union FED Fonds Europeen de Developpement FER Fonds d'Entretien Routier IMF International Monetary Fund IMT Intermediate Means of Transport MTPTHU Ministere des Travaux Publics, Transports, Habitat et Urbanisme NMT Non-Motorized Transport NPV Net Present Value PIEU Project Implementation Unit PPF Project Preparation Facility PST2 Second Transport Sector Project RTT Rural Travel and Transport RTTP Rural Travel and Transport Program SNER Societe Nationale d'Entretien Routier SSATP Sub- Saharan Africa Transport Policy Program VOC Vehicle Operating Costs

Vice President: Callisto Madavo Country Director: Robert Calderisi Sector Manager: Maryvonne Plessis-Fraissard Task Team Leader: Andreas Schliessler Chad National Transport Program Support Project

CONTENTS

A Project Development Objective ...... 2

1. Project development objective...... 2 2. Key performance indicators ...... 2

B Strategic Context ...... 4

1. Sector-related Country Assistance Strategy (CAS) goal supported by the project ...... 4 2. Main sector issues and Government strategy ...... 4 3. Sector issues to be addressed by the project and strategic choices ...... 10

C Project Description Summary ...... 12

1. Project components ...... 12 2. Key policy and institutional reforms supported by the project...... 13 3. Benefits and target population ...... 13 4. Institutional and implementation arrangements ...... 14

D Project Rationale ...... ,15

1. Project alternatives considered and reasons for rejection ...... 15 2. Major related projects financed by the Bank and/or other development agencies ...... 16 3. Lessons learned and reflected in the project design...... 17 4. Indications of borrower commitment and ownership ...... 17 5. Value added of Bank support in this project ...... 18

E Summary Project Analysis ...... 18

1. Economic ...... 18 2. Financial ...... 20 3. Technical ...... 21 4. Institutional ...... 21 5. Social ...... 23 6. Environmental assessment ...... 24 7. Participatory approach ...... 26

F Sustainability and Risks ...... 28

1. Sustainability ...... 28 2. Critical Risks ...... 28 3. Possible Controversial Aspects...... 28 G Main Credit Conditions...... 29

1. Effectiveness Conditions ...... 29 2. Other ...... 29

H Readiness for Implementation...... 30

I Compliance with Bank Policies...... 30

Annexes

Annex 1. Project Design Summary Annex 2. Detailed Project Description Annex 3. Estimated Project Costs Annex 4. Cost-Benefit Analysis Summary Annex 5. Financial Summary Annex 6. Procurement and Disbursement Arrangements Annex 7. Project Processing Schedule Annex 8. Documents in Project File Annex 9. Statement of Loans and Credits Annex 10. Country at a Glance Annex 11. Procurement Capacity Assessment - Summary Annex 12. Summary of Transport Sector Environmental Assessment

Maps (2) CHAD National Transport Program Support Project Project Appraisal Document

Africa RegionalOffice AFTTR Date: September29, 2000 Team Leader: Andreas Schliessler CountryDirector: Robert Calderisi Sector Manager: Maryvonne Plessis-Fraissard ProjectID: P035672 Sector(s): TH -Highways LendingInstrument: SpecificInvestment Loan (SIL) Theme(s): PovertyReduction; Transport Poverty Targeted Intervention: N

Project Financing Data O Loan 1 Credit Ol Grant El Guarantee [ Other (Specify)

For Loans/Credits/Others: Amount(US$m): 67.0 Proposed Terms: Standard Credit Grace period (years): Years to maturity: Commitment fee: Service charge: % Financing Plan: _0r L FOn: u _ TOWl GOVERNMENT 24.13 0.00 24.13 IDA 22.44 44.56 67.00 Total: 46.57 44.56 91.13 Borrower:REPUBLIC OF CHAD Responsibleagency: MINISTRY OF PUBLIC WORKS,TRANSPORT, HABITAT AND URBAN DEV. ProjectCoordination Unit (CISCP) Address: N'Djamena,Chad ContactPerson: AhmedNene Tassy, Project Coordinator,Ministry of Public Works, Transport,Habitat and Urban Development. l'el: (235) 52 27 71 Fax: (235) 52 37 09 Email: [email protected] Other Agency(ies): Ministry of EconomicPromotion and Development Address: N'Djamena,Chad Contact Person: Mr. AhmedLa_nine Al, Ministre Estimateddisbursements( Bank FYIUS$M): Anua 1 2ii1 200 2004 200 Annual 22.7 23.6 13.7 4.5 2.5 Cumulative 22.7 46.3 60.0 64.5 67.0 Project implementationperiod: 5 years Expected effectivenessdate: 12/31/2000 Expected closing date: 07/31/2006 OC=PAD F-m R. lh, Z A. Project DevelopmentObjective

1. Projectdevelopment objective: (see Annex I) The overall development objectiveof Chad's National Transport Program is the reduction of poverty and rural isolation, through improved year-round access to markets and services (both social and administrative)especially in the rural areas, where more than 90 percent of the poor live. The National Transport Program is also aimed at improving national food security, a critical issue in Chad, where repeatedfamines have occurred in different parts of the country. Furthermore,reliable access to regional markets within Chad will contribute to a reduction and stabilization of consumer prices for basic consumptiongoods and more stabilizedincomes to farmers,most of whom are vulnerableand poor.

The project (National Transport Program Support Project, in French PAProNaT - Projet d'Appui au Programme National des Transports) will directly support the implementationof the Government's National TransportProgram and the underlyingTransport Sector Strategy,which were developedunder the ongoing Second Transport Sector Project (PST2). The National Transport Program was defined and formulated during 1998 and 1999, taking into account the outcomes of numerous participatory consultationsnot only with rural communities,but also across sectors, including mainly health, education and agriculture/ruraldevelopment. The funds provided by the Bank under this project will finance roughly 15 percent of the expenditures programmed under the National Transport Program for the period 2000-2005,the remainder being financed by numerous other donors and the Government. PAProNaT is thus part of a much larger and multisectoraleffort of the Government and the entire donor community active in Chad. However, in response to requestsby the Governmentand various donors, the project will also monitor the overall progressof the National TransportProgram.

2. Key performanceindicators: (see Annex 1) The proposed project (PAProNaT) constitutes an integral part of the much larger National Transport Program 2000-2005. There are therefore two sets of performanceindicators to be monitored, the first set relating to the overall goals of National Transport Program as a whole, and the second set relating to the much more specificand limitedgoals of the PAProNaTto be financedby the Bank.

The underlyingjustification of the National Transport Program is that reliable year round access to markets and services is an essential ingredient in the broader effort to reduce poverty and improve food security. Because Chad is a vast country with very limited human and financial resources, the National Transport Plan has been calibrated to ensure a minimum level of transport infrastructureand services that (i) can be sustained with resourcesmostly generatedwithin Chad; and (ii) will fulfill the most essential and urgent access needs within the country. In the longer term, the National Transport Program provides a basis for an eventual scaling up of these service levels, but in the immediateterm, the task at hand is to establish a small, but reliable and well maintained core transport networkwhich will provide a platform for economicand social developmentthroughout the country.

Performance indicators for the National Transport Program, will thus reflect the goal of improving year-roundaccess to markets and servicesthrough a core national road networkthat can be maintained in a cost-effectiveand sustainableway. These indicatorsare:

* Year-round access to key areas of Chad provided on the backboneNational Road Network of about 2,600 km, to be achievedby mid-2005; * Average prices of 12 basic consumer goods on selected regional markets in Chad reduced by 10

- 2 - percent in real terms by mid-2005; * Price fluctuations (between dry and rainy season) of 12 basic consumer goods on selected regional markets reduced to a ratio of 1:1.3by mid-2005; * 10 percent decrease in average market transport rates in real terms, for goods and passenger traffic (measured in price per ton- and passenger-kmrespectively) for transport between the provincial capitals and N'Djamena, between 2000 and 2005; * At least 55 percent of the backboneNational Road Network of 2600 km in good or fair condition by 2005 (during dry season); * At least 60 percent of the backbone National Road Network managed and maintained under performance-basedcontracts with the private sector by end of 2005; * Dry-seasonaccess to additional areas providedthrough some 3600 km of low-standardroads under the responsibilityof MTPTHU.

The lack of reliable baseline data does not allow today to establish numeric and monitorableperformance indicators for road safety and HIV/AIDSprevalence along the main transport corridors. These indicators will howeverbe developedduring and as a part of projectimplementation. For example,the introductionof an traffic accident data collection and evaluation system, to be implementedwith Bank financing, will create the basis for monitorableroad safety indicators.

It is evident that the overall success of the National Transport Program will depend on the successful implementationof numerous sub-projects financed by different donors and the Government, of which PAProNaTis only one. The total cost of the National Transport Program, in the period between 2000 and 2005, is in the order of US$ 460 million; most of which is already formally or infortnallycommitted by donors. The proposed Bank-financedproject covers roughly 15 percent of this total cost. However,both the Governmentand other donors, such as the EU, expressedthe wish that the National TransportProgram be monitoredas part of the PAProNaT,with the assistance and supervisionof the Bank's technical staff.

The specific performance indicators for the Bank-financed PAProNaT are consistent with the overall indicatorsfor the National Transport Program,but focus on specific physical outputs and on impacts in the limitedgeographical areas in which the project interventionstake place. These indicatorsare:

X 10 percent decrease in averagerates in real terms for goods and passenger transport(measured in price per ton- and passenger-km respectively) for transport between the provincial capitals east of N'Djamenaand the nationalcapital N'Djamena(by end 2005) * All-yearrideability of at least 1800 km of all-yearNational Road Network achieved(by end 2005) * At least 55 percent of all-year National Road Network in good or fair condition during dry season (by end 2005) * Approximately100 km of the core National Road Network are upgraded to paved standard (by end 2004) * Periodic Maintenanceand Strengtheningof about 200 km of existing paved roads completed (by end 2004) * Establishmentof a Traffic Accident Data collectionand evaluation system on a National level (by end 2002) * First Road SafetyAwareness media campaigncompleted (by end 2003) * Performance-basedRoad Managementand Maintenancecontract for approx. 441 km of unpavedroads awarded(by end 2001) * Average travel speed of 50 km/hour for 2-wheel-drivecars achieved at all times on the all-season NationalRoad Network (by end 2005)

- 3 - * National Strategy for Rural Travel and Transport completed (by end 2003)

Annex I presents the Logical Framework for National Transport Program and the specific indicators of PAProNaT.

B: Strategic Context 1. Sector-relatedCountry Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Documentnumber: IDA/R99-115/3 Date of latest CAS discussion:May 23, 2000

The project supports the CAS goal of removing infrastructureconstraints to private sector-led growth and poverty alleviation. The CAS specifically proposes to concentrate Bank assistance in the critical areas of education, health, rural development and transport. Assistance in the transport sector is considered necessary to achieve results in the first three areas. Transport is a key element of the CAS Objective 3: Removing Constraints to Growth, which focuses on creating enabling conditions and ensuring the attainment of the full value of complementary private and public investments in other sectors. The particular CAS-strategy for transport is to "invest in a basic backbone road network passable year round."

2. Main sector issues and Governmentstrategy:

Sector Context

The high poverty levels in Chad are related to the country's enormous size, its often harsh environment and its population distribution in regional enclaves. Virtually every aspect of social and economic welfare can be viewed within the context of the country's extreme isolation and poor internal integration. From an economic and food security point of view, the non-availability of reliable year- round transport has created numerous agricultural enclaves, where the high cost of transport hinders the inflow of inputs and consumer goods in rural areas, while hampering the outflow of production to food-deficit regions and urban centers. High-potential enclaves of this sort include the Salamat, known as the potential "breadbasket" of Chad, which remains largely unreachablefor larger vehicles for up to half of the year. Studies of agricultural prices show that transport costs can represent as much as 70 percent of marketing costs and from 30 to 80 percent of the gross margin of local cereal prices in N'Djamdna. (Herman et al., Millet and Sorgum Marketing in Chad, DAI, December 1994, as cited in the World Bank, Chad Poverty Assessment: Constraints to Rural Development, Human Development,Group IV, Africa Region, October 21, 1997, page 18.)

The 1997 Chad Poverty Assessment has documented cases where improved physical access has played a key role in increasing agricultural income and improving the quality of life in poor rural communities. In one such case, the Karal area in the Chari-Baguirmi,a newly paved road released a key constraint for the marketing of vegetables and grains, leading to increased incomes, which has led to other improvements, including "the construction of a school, a dispensary, a group warehouse and a meeting house. Producers have also contributed to the supply of potable water by improving and maintaining six water wells in the village. Casual observation shows that housing has improved in Kara, from thatch huts to mud brick houses, with even the advent of some cement-brick houses." (Ibid, page 21-22)

Physical isolation has also been a factor when considering access to a wide variety of social services, such as health and education facilities. During the regional participatory workshops for the National Transport Strategy, poor access was cited as a critical factor when addressingother sectoral concerns. These included particularly access to health clinics and water supply, as particularly emphasized by women.

-4- The major project-relatedstrategic challenges in Chad are to: (i) improve the efficiency of Chad's transport system by providing a minimal but reliable National Road Network, allowingyear-round accessibilityfor an increasingportion of the population, especiallyfor the rural poor; (ii) remove constraints to rural growth, regional and internationaltrade, and private sector development; especially those constraints that are imposed by the present poor condition and reliability of the road network; (iii) build the institutional framework and capacity for efficient road network management and maintenance,including a sustainablefinancing mechanism for road maintenance; (iv) extend private sector participation in roads beyond the execution of physical works, to performance-basedroad managementand maintenancecontracts, and (v) improve road safety,both on urban streets and on inter-urbanroads (vi) reduce the spread of HIV/AIDS along the major transport corridors and around road construction camps

Sector Issues (i) Traditional appraisal methods for sector investments have not been appropriate. Despite considerableinvestments in the transport sector, and the road sector in particular (within the Transport Sector Adjustment Project 1989-1993 and the Second Transport Sector Program 1994-1999) the developmentof industry,agriculture and commerce,and the accessto social and administrativeservices are still adverselyaffected by severe isolation. The primary road network is, to a large extent, not passable during severalmonths of the year, and entails high transport costs during the rest of the year, due to the poor conditionof a significantportion of that network. The poor results of previous interventionsand the lack of sustainabilityof some of the investmentsmade in the past can be attributedto severalfactors. First, the selectionof the road sectionsto be rehabilitatedor constructedwas not made on a consistentbasis and was stronglyinfluenced by the regionalpreferences of some donors. Secondly,projects were selectedbased on the economic rate of return of individualroads or road sections. These approacheshave had several major drawbacks. On the one hand, they mostly favoredroad rehabilitationand upgrading optionswithout the provisionof a blacktoppavement, very often in areas with extremelybad soil conditionsand where no suitable natural road constructionmaterials are available. Under these conditions, those unpaved roads would have required an optimaland fine-tunedmaintenance strategy, for which neitherthe financialnor the institutionalresources were available. The result was often a very rapid deteriorationof those unpaved roads soon after being rehabilitated/constructed.In addition, the strong focus on economic rates of return tended to exclude projects of strategic, social or poverty-reducingimportance, which are nevertheless essential for the developmentof the country. Traditionaleconomic appraisalmethods depend largely on vehicle operatingcost savings, and where low populationdensities and low levels of economicactivity do not generatesufficient traffic volumes,such as in many areas of Chad, they cannotjustify even a very basic road network.

(ii) The typical distinctionbetween a Primary Road Network and Rural Roads is not applicablein Chad. In most countries,even in Africa, the Primary Road Network is mostly paved and has relatively important averagetraffic volumes of at least 500 vehicles per day, and in many cases much more. Rural Roads on the other hand have typical average traffic volumes of around 50 vehicles per day, and their physical characteristicsare very different from those of the Primary Road Network. In Chad, however, these definitionsare not valid. The very low populationdensity results in low traffic volumesof only some

- 5 - 50 vehiclesper day on averageon the primary National Road Network,and only 300 km of roads in Chad have an average daily traffic in the order of 200 to 500 vehiclesper day. This means that most of Chad's National (Primary) Road Network clearly has characteristics of Rural Roads, both in terms of traffic volume and physical characteristics. In turn, most of what are called Rural Roads in Chad carry less than 5 vehiclesper day, and often not a singlevehicle in several weeks;they would be called rural accesspaths elsewhere. On the other hand, due to the very flat terrain in most parts of Chad, non-motorizedtraffic and even light trucks can travel almost anywhereduring the dry season, even if there is no formal road. From the above it becomes clear that conventionalassumptions and knowledge concerning Main Roads and Rural Roads are not applicablein Chad.

(iii) Road maintenancefinancing has not been adequate. The mobilization of domestic funds has sometimes been insufficientto even finance routine road maintenance,let alone periodic maintenance, rehabilitationor construction. Despitecontinued donor support for the road sector, maintenancemeasures are not sufficientto maintain acceptableroad service levels due to a frequentshortfall of funds. In orderto ensure the availability of sufficient funds for road maintenance, the creation of the CAER (Compte Autonome d'Entretien Routier), an independent financing mechanism outside the regular Government budget, was introducedin 1994 at the beginningof the ongoingSecond Transport SectorProgram. In late 1998,however, the Governrnentreintegrated the resourcesof the CAER into the Governmentbudget. This loss of autonomy,together with some other measures introducedby the Ministry of Finance, and also the non-availabilityof some promiseddonor support led to seriousfunding shortfalls in 1998and 1999. It also led to the recognitionthat the system introducedin 1994 had collapsedand that a new financingmechanism for road maintenanceneeded to be introducedas soon as possible. This was achievedin August 2000, with the creationby law of the new Road MaintenanceFund (FER -Fonds d'EntretienRoutier).

(iv) There has been no comprehensivestrategy for rural transport. Althoughsignificant investments in so-calledrural roads have been made during the past two decades,there has not been an official policy for rural transport. Some rural road projects are part of integrated rural development projects and are implementedunder the Ministry of Agriculture. Other importantinvestments were made in the context of cotton production. Apart from these isolated interventions,however, there has so far been little or no organized management and maintenance of those roads, nor an assessment of whether these roads correspondto the actual needs and characteristicsof rural transportin Chad, nor any coordinationbetween differentGovernment Ministries involved in rural roads.

(v) Continuedinstitutional support is required. Duringthe past ten years there has been some progress in capacity-buildingat the MTPTIHU. Overall, its organizationalstructure is adequate and most key positions are held by reasonably qualified staff. Since 1993 there has been a significant transfer of activitiesfrom the MTPTHUto the private sector; that same year the Ministry gave up all force account works and has since been contractingout to several private enterprisesall physical road maintenanceand constructionworks. Also, local consultantswere trained under PST2 and are now used by MTPTHUto carry out supervision of road maintenance. Nevertheless, the Roads Department still experiences considerablecapacity constraintswith respectto planning,programming and supervisionof road works. In addition,the ministry's professionalstaff is aging; younger staff and new recruits need substantialtraining and coachingduring the coming years.

(vi) Road safety needs to be systematicallyaddressed. Althoughreliable data are not available,there are clear indicationsthat traffic accidents create significantlosses in terms of personal injury and death, and materialdamage. Major causes are the lack of safety awareness, age and poor technical condition of the vehicle fleet, poor condition of roads, overloading of vehicles, and insufficientenforcement of traffic regulations.

-6 - (vii) Spread of HPV/AIDSalong transportcorridors. There is growing recognitionthat the spreading of the HIV/AIDSvirus follows the main transportcorridors, and in particular internationallong-distance routes. As a result,the fight againstHIV/AIDS must be supportedby the transportsector.

GovernmentStrategy In order to address the above issues, the Government,with support from the Bank under the ongoing Second Transport Sector Project, embarked on a national study and consultation process to redefine its transportsector strategy. This includedtechnical, economic and institutionalanalyses of the road network condition and management,as well as a series of both regionaland village-levelworkshops to solicit the views of the populationand engage public participationin the process. As a result of the analyses and regional workshops,the Governmenthas elaborated(i) a National Transport Policy Letter, (ii) a 10-year National Strategyfor the TransportSector and (iii) an InvestmentPlan for the period2000-2005 (Lettre de Politique Generaledans le Secteur des Transports;Diagnostic et Strategie de Developpementdu Secteur des Transportsau Tchad; Programme Indicatif des Depenses du Secteur des Transportsau Tchad, all dated Novembertous date du novembre 1999.) These documentswere presentedto a Donors Roundtable Meeting in November 1999. The Policy Letter assessesthe needs, constraints and lessons learned from previousexperience, and lays out six sectoralobjectives:

* Reduce isolationwithin the country and fromthe outsideworld; * Reduce transportcosts, for both internaland internationalexchanges; - Maintainminimum all-year accessfor the principalregions within the country; * Establisha minimum all-year national road networkthat will assure access among the principal cities in the country; - Continue liberalizationof the transportsector and modernizegovernment management; * Support the populationin their own efforts to develop rural transport infrastructureand intermediate forms of transport. Based on these objectives,the Policy Letterputs forth twelve ActionPlans for the transportsector: 1. Road rehabilitation 2. Roadmaintenance 3. Road research 4. Ruraltransport improvements 5. Road sector industry 6. Road safety 7. Internationaltransport corridorsto reducethe country's isolation 8. Air transport 9. Implementationand monitoring 10. Humanresources I1. Environment 12. Developmentof transporton Lake Chad

The PolicyLetter and its Action Plan providethe foundationfor the National Strategyfor the Development of the Transport Sector and the IndicativeInvestment Plan (jointly called National Transport Program). The National TransportProgram was well-receivedat the November 1999 donors' roundtablemeeting and is supportedby the Bank. The followingsummarizes the main strategicelements of the Program:

(i) NetworkApproach: The National TransportProgram representsa departure from past approaches in

- 7 - road network development and management. Instead of constructingor rehabilitating individual road sections without sufficientlytaking into account the importance of a basic backbone network and the impact on other sectors,the new strategy focuses on a more coherent network approach. Thisapproach is based on a multi-sectoraland multi-criteriaevaluation of the developmentimpact of the road networkat the national level. For the implementationof this strategy the Governmenthas defined a road classification system dividingthe road networkinto (i) an all-year-roundNational Road Network of some 2,600 km, (ii) a dry-season-onlyNational Road Network of some 3,600 km, (iii) a regionalrural road network,and (iv) a local access path network. The MTPTHU will take responsibilityfor the National Road Network of all-season and dry-season-onlyroads. It is important to emphasizethat the size of the National Road Network is rather limited and has been determined on the basis of Chad's capacity to mobilize local resourcesfor routine road maintenance. The regionalrural road network of some 3,000 km and the access path network of some 30,000 km shall, in the medium-term,come under the responsibilityof regional bodies to be createdunder the ongoingdecentralization program, and under local village communities. In the meantime,the Government will provide support to local self-help initiatives for maintenance and conservationof existing rural roads. This support will come mainly through Governmentministries other than MTPTHU. Somedonors, includingthe Bank, will supportthese initiativesunder Rural Development and Local Capacity-Buildingprojects. In addition, PAProNatwill assist in the developmentof a National Rural TransportStrategy through an RTTP component (see Rural Transport Strategybelow).

(ii) RoadMaintenance Financing: As part of its Action Plan for Road Maintenance,the Governmenthas formally declared its intention to establish a Second-GenerationRoad Maintenance Fund, to be fully operationalin January2001. Based on new legislationon the Road MaintenanceFund which was formally introducedin August 2000, the cost for the maintenanceof the National Road Network will be financed from specific resources,part of which are integrated into the pump price of fuel. This will provide an independentand reliable source of funding, not subjectto the vagaries of the annual budget process. The new funding mechanismwill function outside the Treasury and the Ministry of Finance, although the annual resourcesmobilized for road maintenancewill appear in the Tableau des Operations Financieres de l'Etat (TOFE). The level of road maintenancefunding will not be part of the annual budget discussions. The Bankis givingtechnical advice to the Governmenton the introductionof the new fundingmechanism.

Due to the present low traffic volumes in Chad, the Road MaintenanceFund will initiallyonly be able to financeroutine maintenance. There is an agreementin principlewith the main donors that they will provide financial support to periodic maintenance activities. Eventually,in the medium term, increasingtraffic volumes will increasethe revenues of the Road MaintenanceFund, which may then gradually help to financeperiodic maintenance.

(iii) Performance-basedRoad MaintenanceContracts: Efficiencygains have been achievedduring the past years by fully contracting out road maintenance works to private contractors. However, further improvementsin efficiency are necessary in view of the scarce resources available for road maintenance. These improvementsare expected to materialize through the introduction in Chad of performance-based Road Managementand MaintenanceContracts. The Bank is actively supportingthis approachby giving technical advice on the preparation of bidding documents for these contracts, and the PAProNaT will include a pilot program to test performance-basedcontracting methods on some 440 km of unpavedroads of the NationalRoad Networkduring a 4-year period.

(iv) Rural Transport Strategy: During the regional participatoryworkshops, it was agreed that the central Government'simmediate priority must be to focus on establishingand maintainingthe backbone National Road Network, and this will be the main task for the MTPTHU. Nevertheless,rural transport is considered important, and the previously isolated and uncoordinatedefforts in the area of rural roads

- 8 - should give way to an approach which will emphasize rural transportand travel. This approach must be based on a Rural Transport Strategy to be developed. In any case, before the actual materializationof oil revenues in Chad, there will only be very limited direct interventionsby the MTPTHU in rural roads and access paths. It should also be noted that the mostly non-motorizedrural transport in Chad is, to a very large extent, not dependent on formal and "engineered" rural roads. This is due to the prevailing topographic and climatic conditions: very flat terrain, which is dry enough during much of the year to support at least non-motorizedmeans of transport (mostly oxcarts, donkeys, pushcarts, bicycles, etc.), but also some motorizedtraffic. In addition, other agencies, and several donors, will provide support in this area. Rural roads which are directly linked to cotton production will receive funding from French and EU sources. Moreover, cotton farmers and/or COTONTCHAD will most likely also contribute to the maintenanceof cotton roads. Finally, some donors, includingGermany and the Bank, will provide support to rural roads and access paths through rural development projects, local capacity-buildingprojects, and agricultureprojects.

In view of this situation, the Government'sAction Plan for Rural Transport envisions the developmentof studies leading to the definition of a more uniform strategy for addressingrural transport in the short and longer terms. This would include the application of low-cost approachesto achieving minimum service levels (such as spot improvements)in the managementof the regionalrural roads and access paths, as well as the promotion of various forms of non-motorizedtransport. PAProNatwill support the developmentof this policy through the Rural TransportStrategy Component.

(v) Road Safety: The National Transport Program'sAction Plan No. 6 focuses on improvingroad safety conditions. The Government has come to recognize the extensive damage caused by the high number of traffic accidents as a serious problem which needs to be addressed. As a result, the MTPTHU's Directorate of Surface Transport (DTS), which is responsiblefor the promotion of road safety, shall be strengthenedthrough the PAProNaT to be able to better cope with this task. The measures to be financed under the project include: (i) a traffic accident data collection and evaluation system, (ii) a road safety awarenesscampaign, (iii) physical measures to improve accident-pronespots in the capital N'Djamenaand other urban areas, and (iv) a national Road Safety Study and Action Plan.

(vi) Fight against HIV/AIDS through transport sector-related activities. The Government'smain instrumentin the fight against HIV/AIDS has been the ProgrammeNational de Lutte contre le SIDA - PNLS supportedby various donors includingthe Bank. As part of the PNLS, a specificsub-program has been defined in coordinationwith the MTPTHU,titled Programmede Lutte contre le SIDA sur les axes de communicationdu Tchad, in recognitionthat the spread of HIV/AIDSoccurs mainly along the main road corridors. The main objective is to combat high-risk behaviours of those population groups which frequentlytravel and/or live close to main roads. The cost of this sub-programis roughly US$ 2.0 million over the total projectperiod of 5 years, and the PAProNaTwill contributeUS$ 500.000 to this effort.

(vii) Air transport liberalization.The air transport action plan designedby the Governmentfollows the main principlesagreed by the Bank and the Governmentsof the region. The main goal in the air transport sector for CentralAfrica is to encouragemarket liberalizationby improvingthe economic efficiencyof the air transport system. The primary concern is how to improve the economic aspects of the sector while simultaneously undertaking initiatives concerning technical assistance. They are included in the Memorandumof Understanding- YamoussoukroDecision. Improvementsin air safety and security are nevertheless vital for a liberalized air transport system where operators will require more advanced oversight. This will also help alleviate the present lack of capacity to attract private investments for modernization.

-9- 3. Sector issues to be addressedby the project and strategic choices: (i) Road Network Managementand Conservation. While a large share of the project resourceswill go towards the physical rehabilitation,upgrading and maintenance of roads (both paved and unpaved), the project will also continue to support the Government in the practical implementationof the reform of road network managementand conservation. The reform includes a redefinitionof the roles of the Government and the private sector and the mobilization of more stable resources for road maintenance through a Second-generationRoad MaintenanceFund (FER - Fonds d'Entretien Routier).

(ii) Institutional Arrangements for Second-Generation Road Maintenance Fund. For the implementation of the Road Maintenance Fund (FER), a choice had to be made concerning the responsibilityfor the technical managementof road networkmaintenance. While this function is presently with the Road Maintenance Unit of MTPTHU, it was initially suggested,and considered during project preparation,to transfer this responsibilityto the new Road MaintenanceFund, which would then become a true Road MaintenanceAgency. However, it was finally decidedthat the Road Maintenance Fund would not exercise the technical managementof road maintenance,but would instead delegate it to MTPTHU through a formal agreement to be signed among the two parties. This arrangement will allow the Road MaintenanceFund to be a very small organizationconsisting of a secretariatwith a permanent staff of not more than five. Decisions will be made by a SupervisoryBoard in which private sector representatives would constitute the majority, and which would meet in fixed intervals. The FER's responsibilitywill be limitedto: (i) collecting the road user fee; (ii) disbursing funds in accordancewith specific guidelinesand procedures and based on pre-agreedexpense eligibility criteria;and (iii) exercisingtechnical verifications and audits related to disbursements,both prior and ex-post. The Road MaintenanceUnit of MTPTHU will maintainresponsibility for the technical managementof monitoringof road maintenanceworks, which in Chad is carried out exclusively through private enterprises since 1994. This solution would involve minimal disruption in the utilization of existing.institutionalcapacities at MTPTHU, while introducing accountabilityof both MTPTHUand the Road MaintenanceFund, towards the Government, Road Users and donors.

(iii) Performance-basedRoad Management and Maintenance Contracts. A relatively large pilot operationto be financed under the project will allow MTPTHUto gain practical experience in the transfer of responsibilityfor Road NetworkManagement and Maintenanceto private enterprises. Those enterprises will be held accountable for providing a pre-defined and measurableroad service quality levels. In the longer term, the Govermmentmay eventually limit itself to the role of a regulatoryagency, and will only monitor the compliance of the private Road Management Companies with the agreed service quality standards. The introduction of revised concepts and approaches for road network management and conservationwill require various forms of training and institutional strengtheningactivities. The project will provide institutionalstrengthening, mainly to the MTPTHUand the future Road Maintenance Fund, through training and technical assistance in the following: (i) contract administration,management and supervision;(ii) managementsupport includingthe developmentof model contracts,and the improvement of procedures for the preparation, evaluation and award of contracts, and (iii) the development of appropriate management information and accounting systems. In addition, the project will provide financingfor a limited amount of equipmentand some office modernization. The project will also provide training to the private sector, specifically to transport operators, road maintenance contractors, and members of the Board of Directorsof the future Road MaintenanceFund.

(iv) Rural Transport. Regarding rural transport, it was determinedthat the best way to address this issue at this stage would be to provide the needed assistance for the formulation of a rural transport strategy. Given the vastness of the country,the physical and topographiccharacteristics of rural areas and the basic

- 10- decentralizationpolicy, this effort will enable the Governmentto: (i) clarify roles and responsibilitieswith decentralizedregional and local authorities;(ii) assist communitiesto develop cost-effectiveapproaches for the managementof their regional and rural access path networks, and emphasizethe concept of Rural Transport instead of rural roads. These approaches will focus on achieving absolute minimum service levels that respond to the needs and physical conditionsof the rural communities,and can be maintained withintheir own financialand other means.

(v) Road Safety. Given the dearth of road accidentdata and institutionalcapacity in this domain, it was determined that a Road Safety component of the project should concentrate on setting up a basic institutionalcapacity and data bank on road safety, and finance various smaller pilot initiatives. These wouldfocus on developingbetter informationupon which future planningcan take place, and strengthening the units responsiblefor monitoringroad safetyin Chad.

(vi) HIV/AIDS. The design of the HIV/AIDScomponent of the project was based on the recognitionthat a joint approachof the Health and Transport sectorsare neededto achieveresults. As a result, a five-year program of activities was developedby the staff of Chad's National AIDS Program (PNLS - Programme National de Lutte contre le SIDA) with input and support from the transport sector, in particular the National Trucker's Union (SyndicatNational des Chauffeurs Tchadiens- SNCT) who will participate in the implementationof the program. The program is aimed at certain segments of the populationwhich frequentlytravel along major road corridors, such as truckers, migrants,traveling traders and prostitutes. It should both raise awarenessof the AIDS problem and provide means and methods to both protect the target groups and avoid the spread of the disease. The program will be financed by various donors; PAProNaTwill contribute US$ 500,000, which correspondsto roughly 25 percent of the program'stotal cost.

(vii) Air Transport. The improvementof air transport situation in Chad involves a certain number of measuresin the followingfields:

Civil AviationLaw and Regulations A revisionof the currentCivil AviationLaws and subsequentregulations is neededto fulfilltwo objectives, given the developmentand dynamicchanges the sector is facing worldwide:a) to have a modern legislation and b) to allow a continuousupdating process. The consequenceof the current deficientlegal frameworkis twofold. It prevents the implementationof basic civil aviation technical requirements,which in turn, hindersthe region'sair transportsector from keepingpace with the rest of the world.

Civil AviationAuthorities ' Strengthening Due to the current structure and institutionalarrangements, the civil aviation authoritiesare typically the weakest link in the subsector. There are not enough human, technical or financialresources for them to performtheir duties adequately. To improvethe regional civil aviation,the civil aviation authoritieshave to be strengthenedby providing them with the necessary tools (i.e. administrativeand financialautonomy, training, etc.) in order to enforcethe regulations.

Safety Oversight Safety oversight is the responsibilityfor each State to ensure an effective implementationof safety regulations.Safety is essentiallyperforming a series of controls and proceduresdesigned to avoid aircraft mishaps and thereby preventing the tragic loss of human life. Actions are needed, particular in the following areas: a) primary aviation legislation and regulations, b) institutional structure, qualified personneland financialresources, and c) certificationand supervisionof commercialtransport operators.

- 11 - Security To address adequately security issues, significant preventativemeasures must be implementedto reduce airport vulnerabilities,such as the ability to control the access to restricted areas; and to detect explosives, weapons, drugs,etc.

General safety investmentfor airports and air navigationservices (ANS) and cost recovery Traffic liberalizationand resulting improvementsin cost efficiency are only viable in combination with enhanced safety, improved institutional capacity and oversight. Cost recovery is an important part of interactionsbetween airlines,infrastructure and institutions.

The financingof some of the measures describedabove might be eventuallyprovided by a part of the funds assigned to the InstitutionalSupport project component.

C. Project DescriptionSummary 1. Projectcomponents (see Annex 2 for a detailed descriptionand Annex 3 for a detailed cost breakdown):

ff~~ -of~~~~Sco t. cin Ba k- 1. Road Investment 60.90 66.8 44.26 66.1 2. Road Maintenance 19.57 21.5 14.24 21.3 3. Road Safety 2.04 2.2 1.50 2.2 4. Rural Transport Strategy 1.24 1.4 1.00 1.5 5. InstitutionalSupport 6.27 6.9 5.00 7.5 6. HIV/AIDSand Transport 0.61 0.7 0.50 0.7 Refundingof PPF 0.50 0.5 0.50 0.7 Total Project Costs 91.13 100.0 67.00 100.0 Total FinancingRequired 91.13 100.0 67.00 100.0

Note: Indicativecosts includeall taxes, duties and contingencies.

The project will be an integral part of the Government'sNational Transport Program, in particular for the first phase of that program (2000-2005). This first phase (of what is essentially a sector expenditure progran) foresees total expenditures of US$ 458.3 million (excluding taxes). The Bank financing of US$67 millionrepresents approximately 15 percent of the cost of the entire program.

- 12 - 2. Key policy and institutionalreforms supported by the project: The reform of Road Network Managementand Maintenance,and of Road MaintenanceFinancing, will be the principal institutionaland policy reform sought through the project. Decisions on the basic principles to be applied for this reform have already been made by the Government. Much attentionhas been paid to ensuring that these principlesconform to the macroeconomicconcepts applied in Chad and elsewhere,but avoiding at the same time the lack of reliability of budget financing of road maintenance. A particular feature is that the new funding mechanismwill be functioningoutside the Treasury and the Ministry of Finance, and that the level of the road user fees will be determinedby a specific law/decree;it will not be part of the annual budget discussions. As noted earlier, the annual user fee amounts for the Road MaintenanceFund would still appear in the Government'sTableau d'Operations Financiers.

In a broader contextand as mentionedbefore, the project will financethe definition of an overall policy for rural transport.

3. Benefitsand target population: The main benefits from the National Transport Program (of which PAProNaT is an integral part) will be: (a) poverty reduction, as a result of substantialimprovements of access by the rural populationat large to markets and services(social and administrative),in particular in termnsof reliability of that access and also its cost; (b) elimination of constraints to the development of agriculture, industry and commerce and the effectivenessof social services, which are until today restricted by a road network that is not passable for severalmonths of the year; (c) better food securityand thus reduced vulnerabilityof rural people who today are periodicallythreatened by famines, in particularwomen and children; (d) improvedaccess to all main regionsof the country,thus enablingthe implementationof varioustypes of povertyreduction programsand of sector programs in rural development,agriculture, health and education, all of which require reliable transport servicesand all-year accessto the project-areas; (e) better political and administrative integration of the country, and the creation of an enabling environmentfor decentralization; (f) a more efficient system of road network management and maintenance, resulting in increased cost-effectiveness;and (g) transfer of risk management from the public to the private sector, in particular for road maintenance planning and possiblecost overruns.

Target population: (a) The rural population at large living in the wider zone of influence of the National Road Network, through better access and lower transportcosts; (b) Women and children, who are particularlythreatened by famines occurringregularly in Chad, through improvedfood security; (c) The urban populationat large, through more reliable supply of food produced in different rural areas, and smallerprice fluctuationsduring the rainy season owing to blocked roads; (d) Road users, throughimproved road conditionsand reduced vehicleoperating costs.

- 13 - 4. Institutionaland implementationarrangements: Projectimplementation period:

Project implementationwould run from January 2001 through to January 2006. extend to the fourth quarter of 2005. The 5-year project period would provide some safety margin for the execution of the 4-year pilot project of Performance-basedRoad Network Managementand MaintenanceContracts.

ExecutingAgencies, Project Coordination and Oversight:

The executingagency for all project components(except the HIV/AIDScomponent) will be the Ministry of Public Works, Transport,Housing and Urban Development. The HIV/AIDScomponent will be executed by the Ministry of Economic Promotionand Development. The MTPTHU will receive substantialsupport from the Project CoordinationUnit Cellule de Suivi et Coordinationdes Projets (CISCP). The CISCP has since 1990been the Project CoordinationUnit for almost all donor-financedprojects in the transport sector, including the Bank-financed PASET and PST2 projects. It has in place well-established project managementand accounting proceduresacceptable to the Bank. It is adequately staffed and has a good track record; major implementationproblems are therefore not expected. As has been an established practice in past and ongoing projects, the CISCP will coordinatethe activities of various departments of MTPTHUwho are involvedin the practical implementationof differentproject components:

(i) The Roads Directorate (DR - Direction des Routes) will be in charge of the Road Investment Component (paving and rehabilitation) and, through the Road Maintenance Unit, the Pilot Road Managementand MaintenanceComponent.

(ii) The Directorate of Surface Transport (DTS - Direction des Transports de Surface) will coordinate activities related to the Road Safety component, in cooperation with the National Police. Additionally, because of its staff in all provinces of Chad, DTS will be responsible for collection and monitoring of project impact data, in coordinationwith the Directorate of Studies and Planning (DEP). The DTS will further monitor the project-sponsoredactivities related to the fight againstAIDS/HIV.

(iii) The Planning Directorate (DEP - Direction des Etudes et de la Planification) will coordinate the Rural Transport StrategyComponent and will also be in charge of coordinatingcertain consultantstudies.

The CISCP will maintain the project accounts and a general control and oversight over all project activities. This arrangement has been functioning successfully for at least 8 years now and will be continued.

Accounting,Financial Reporting and AuditingArrangements:

Project accounts and the compliance with the project implementationmanual will be audited annually according to generally accepted auditing standards by an independent auditor acceptable to IDA. A consolidatedannual financial audit report will be submitted to IDA within six months of the end of each financialyear. In addition,the accountsof the Road MaintenanceFund will be auditedevery three months, also by an independentauditor, and the results submittedto the Bank and other Donors who are interested to follow up on this important issue. In addition to the financialaudits, technical audits of the project will also be carried out three times a year by a qualified specialist acceptable to the Bank, and the technical

- 14 - auditor'sreport will be submittedto the Bank not later than 2 weeks after the completionof each technical audit mission. The process to select the technical and financial auditors is underway and must be completedas a conditionfor effectiveness.

A Project Implementationand ProceduresManual will be prepared. That completion of that manual will be a condition of effectiveness of the Development Credit Agreement. A specialized consultant was selected for this task in August 2000.

Following the practice established during the PST2, the Borrower will prepare semi-annual financial reports,which will normally coincidewith the Bank's supervisionmissions.

At present, the Borrower is unable to produce reports integrating financial, procurement and project indicators. It has been agreed betweenthe Bank and the Borrowerthat this type of integrated reporting,as required underthe Bank's Financial ManagementInitiative, will be in place by June 30, 2002.

Monitoringand EvaluationArrangements:

(i) Similarto the practice established during the PST2, semi-annualprogress reports will be established by CISCP on the basis of the project implementationplan that will be developedduring project appraisal. (ii) Supervisionmissions by Bank staff will take place at least twice a year and a project review will be held at mid-term. (iii) Concerning the performance indicators,the project will finance baseline and monitoring studies to assess the impacts of the National Transport Program, of which the project will be an integral part. The monitoring will verify if program and project objectives are being achieved. In particular, advances towards the goal of reliable transport at a lower cost will be evaluatedthrough regular (three to four times every year) data collection and evaluationof both market rates for goods and passengertransport, and of market prices for selected goods in both rural and urban markets. Of interest are absoluteprice levels and the fluctuationof prices between dry and rainy seasons. (iv) a ICR will be preparedafter projectclosing and presentedwithin six months thereafter.

D. Project Rationale 1. Project alternatives considered and reasons for rejection: The Chad Poverty Assessment of 1997/1998clearly states that the single most important constraint to poverty alleviationis the lack of reliable transport and access to markets and services. Transport in Chad, however, can essentially be divided in two sub-sectors. First, there is Rural Transport and Travel, which employs mostly non-motorized means of transport and takes place mostly on a very extensive network (some 30.000km have been estimated)of simple paths linkingvillages together and providing accessto and from the main road network. Second,there is long-distancemotorized transporton the main roads linking Chad's provincialcapitals among each other and with the national capitalN'Djamena.

The project alternativesconsidered by the Government and the Bank team related to the relative emphasis to be given to either Rural Travel and Transport on the one hand, and to the motorized long-distance transport on the Main Road Network. In order to reach a decision, numerous participatoryconsultations were held in Chad during 1998 and 1999 (see section E.7 on the "ParticipatoryProcess" below). Those consultationsclearly showed that: (i) even with very substantial donor support, the Government simply does and will not have the financial and human resources to provide both nationwide support for Rural

- 15 - Travel and Transport, and at the same time a reliable National Road Network; and (ii) if a choice has to be made, an overwhelming majority of people consulted clearly stated that the Government must give preference to the provision of a minimal, but reliable National backbone road network useable throughout the year. The latter conclusion translated into the main objective of the National Transport Strategy and the National Transport Program, of which the PAProNaT is an integral part.

However, given the importance of rural transport concerns, it was further determined that the project must provide support to the formulation of a rural transport strategy. This will be done in coordination with the regional Rural Travel and Transport (RTTP) program sponsored by the Bank and other donors.

2. Major related projectsfinanced by the Bank and/or other developmentagencies (completed, ongoingand planned). Latest Supervision Sector Issue Project (PSR) Ratings .____:______L__:_ _ (Bank-financedprojects only) Implementation Development Bank-financed Progress(IP) Objective(DO) Agriculture AG Services S S Agriculture Rural DevelopmentPilot Education Basic Education S S Macroecono.(Multisector) SAC I, II, III S S PopultnHealth & Nutr. Health & Safe motherhood S S Popultn Health & Nutr. Health Sector Project Transportation Transport Sector II (PST2) S S Transportation PASET S S Otherdevelopment agencies Transportation Paving of the road Guelendeng-Bongor-Ere (KFW) Transportation Paving of the road Ere-Kelo (EU) Transportation Paving of the road Djermana-Mssaguet(BAD) Transportation Paving of the road Kelo - Moundou (EU) Transportation Paving of the road Moundou-Bolarobou(EU) Transportation Rehabiltationof the road Binder-Lere(KFW)

IP/DORatings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)

- 16 - 3. Lessonslearned and reflectedin the projectdesign: (i) The design of this project has benefitedfrom lessons learnedin numerousprojects worldwide. General issues related to this project, where experience gained elsewhere has helped in project definition and planning, are (i) the participatory approach used in project definition, (ii) the definition of suitable monitoring indicators for overall project success, (iii) the relationship which exists between poverty reduction and basic accessof rural populationsto markets and services(social and administrative),(iv) the particularrisks of spreading AIDS/HIValong major transportand travel corridors, (v) the importanceof introducinga nationalroad safety strategyearly on when motorizationrates rise. Those lessonshave been condensedinto best practiceby the Bank's Transportand other Networks.

(ii) In particular,the reform of Road Network Managementand Conservationas envisaged in Chad clearly takes into accountbest practice lessons: * The replacementof the existing First-Generationfinancing mechanism for road maintenanceby a new Second-GenerationRoad MaintenanceFund is regardedas a fundamentalprecondition for introducing more efficiency into the managementand maintenanceof the national road network in the future. Among the birth defects of the previous funding mechanismwas the lack of continued coordination with the IMF, the incorporationof resourceswhich were non-permanentby nature, and the fact that the old Road Maintenance Fund (CAER) essentially financed Government expenditures,thus violating macroeconomicand fiscal principles. The design of the new, second-generationroad maintenancefund for Chad has to a large degreeremedied these weaknesses. * With support from the project, performance-basedRoad Network Management and Maintenance contractswill be introducedin Chad. They will graduallyreplace the traditionalmaintenance planning and contractingprocedures, under which contractors are paid by the amount of physical work carried out, and thus have a vested interest in large and lumpy contracts. There is however little or no incentivefor ensuring that roads are overall in a good condition. This generates a vicious circle of heavy rehabilitationfollowed by long periods of neglect and thus rapid destruction, accelerated by overloadingof vehicles. The performance-basedroad maintenancecontracts to be introducedin Chad throughthe project are expectedto reverse this vicious circle,because the contractorswill be paid not for the physical works executed, but will receive a fixed monthly payment if the roads are in a good condition as defined in the contract. Contractors will thus have strong incentives to optimize the life-cyclecost of the roads. Given the substantialpresence of private road maintenancefirms in Chad, and the accumulatedexperience in subcontractingroad maintenance,it is considered to be the right momentto advancenow towards performance-basedroad managementand maintenancecontracts. - Past interventionsin the road sector focused on the construction/rehabilitationof individual road sections without sufficientlytaking into account regional aspects and the impact on other sectors. Moreover,no consistentsystem of criteriato determinethe scale and priority of the projectshad been applied. The network approach,which is now applied under the National Transport Program, will ensure that there is a better focus on poverty objectives,since multi-sectorbenefits will be optimized.

4. Indicationsof borrowercommitment and ownership: (i) The project is fully consistent with the new National Transport Sector Strategy developed by the Government with technical and financial support from the Bank. The project is an integral part of the National TransportProgram, which will implementthe new strategy. Since the Transport Strategyand the National Transport Program have been developed by the Government using a broad participatory approach,support and ownershipof the project by all stakeholderscan be expected.

(ii) The Governmenthas already initiatedconcrete activities leading towards the practical implementation of the major reforms which formnpart of the National Transport Strategy. In particular, a formal

- 17 - agreement with the Bank, the IMF and other donors has been reached concerningthe introductionof Road MaintenanceFunding resources in the fuel price, and of the Second-GenerationRoad MaintenanceFund. The new Road Fund Law was formally adopted by Parliament in August 2000. The crucial problem of road maintenancefinancing has also receivedthe attentionof the highest authorities in Chad, includingthe Prime Ministerand the Ministerof Finance, and the Governmenthas actively souglt the Bank's advice and assistance in finding a sustainable solutionfor this issue.

5. Value added of Bank supportin this project: Continued Bank supportto the sector will (i) catalyze a large amount of external investmentresources by other donors for the sector; other donors clearly count on the Bank to provide the policy support to the Government;and to monitor sector performance and performance indicators; (ii) assist the restructuring and commercialization of the road sector by advising the Government on creating an appropriate environmentto attract the private sector to become engaged on a long term basis; (iii) provide a powerful lead for the entire donor community to follow a coherent sector approach when deciding on new sector investments;and (iv) improve the country's growth and poverty-reductionprospects by providing needed infrastructure. Furthermore, the financing by the Bank of the performance-basedroad maintenance contracts will reassure potential bidders with respect to the payment and other risks that they would otherwise not be prepared to take under the present circumstances. Finally, the development of the rural transport strategywill profit from the extensiveregional experience accumulatedthrough the RTTP.

E. Summary Project Analysis(Detailed assessmentsare in the project file, see Annex 8) 1. Economic(see Annex 4): * Cost benefit NPV=US$13.3million; ERR = 16 % (see Annex 4) o Cost effectiveness O Other (specify)

(i) Background. The National Transport Program 2000-2004 has been formulated based on a 10-year National Transport Strategy which covers the period until 2009. It includes a sector investment and expenditure program which identifies priority investments,mainly in the road sector, and was developed based on a multi-criteriascreening methodology. The National TransportStrategy provides the framework for the definition of a National Road Network of a total of 6.200 km, divided into a backbone all-season network of some 2,600 km and dry-season-onlyroads totaling some 3,600 km. The main objective of the National Transport Program is to assure the year-round passabilityof the backbone all-season network, placing the investmentemphasis on the most critical sections and weakest links, which are those which today are interruptedduring several months every year. It is clear that these links are not necessarilythe ones that providethe highest economic rate of return accordingto traditionalevaluation methods;yet it is also clear that without investmentsin those links the overall functioningof the backbone network will be impossibleduring much of the year. The traditionalapproach in the economic analysisof road investments focuses on individualroad links, and uses saving in vehicle operating costs as the main benefit. In some cases, and certainly in the case of Chad, this approach cannot reflect the true economic and social value of improvementsof low volume roads serving sparse populations. In conformity with the Bank's role of lender of last resort, the project will finance investments in those road sections which are critical for the overall functioningof the backboneroad network, and for which other sources of financing have not been identified.

(ii) Methodology. Within this context, an economic evaluation was carried out for those elementsof the investmentprogram to be financed under PAProNaT, in particular for the paving of one road section, the

-18- rehabilitationand strengtheningof existing paved roads and the pilot maintenanceprogram for unpaved roads. The economic analysis of the rehabilitationprogram was done using the World Bank Highway Design and Maintenance Standards Model (HDM-IIl), while the economic evaluation of the paving and pilot maintenanceprogram was done using the Roads Economic DecisionModel (RED) developedby the Bank under the Road ManagementInitiative (RMI) of the Sub-SaharanAfrica Transport Program. The RED is customizedfor the economic evaluationof low-volumeroads by estimatingthe benefits of ensuring all-year-roundpassability and providing the option of defining the level of service of unpaved roads, in terms of both roughnessand vehicle speeds. Both models (HDM-I11and RED) were used to perform a life-cycle economic evaluation of project alternatives, estimating the present value of the net project benefits with relationto the without-projectalternative. For this project,a 15 year evaluationperiod and a 12 percent discountrate were adopted;the net project benefits are the reduction of transport costs in terms of road agency costs, vehicle operating costs and time costs. The HDM-III and RED models estimatethe road user costs in an identical fashion,as a function of the road conditionand vehicle fleet characteristics.

(iii) Results. The economic evaluation of the "package" of Bank-supportedcomponents of the National Transport Program showed an overall project net present value (NPV) of US$ 13.3 million at a 12 percent discount rate, and an economic internalrate of return (IRR) of 16 percent.

Within that overall "package", the paving of the road between Ngoura and Bokoro deserves specific comments. Here, the IRR was calculatedat 11.percent and the NPV at US$ -2 million, at the 12 percent discount rate. This result may however be consideredconservative, because the RED model considersonly certain additionalroad user costs during the rainy season; it does however not considerthe costs, and social consequences,associated with the total impassabilityof the road which occurs every year during the rainy season. In addition, the Bank team also updated an earlier economicanalysis for the Ngoura-Bokororoad section, based on extrapolateddata from the adjacent Bokoro-Mongoroad section. That analysistook into considerationthe aspect of food security. In this sense, there is a special importance of access provided over these roads for serving the food deficit region of Chari-Baguirmi,and for providing a permanent link between N'Djamena and the high-potentialfood-producing region of Salamat. Using an elasticity of 1.5 for the generated traffic, this analysis shows an NPV of US$ 10 million at a 12 percent discount rate, and an IRR of 16 percent.

The economic evaluation of the road rehabilitation/strengtheningprogram resulted in a NPV of US$ 8.4 million with an internal rate of return (IRR) of 20 percent. All individual road sections included in this programyielded an IRR greaterthan 17 percent.

The economicevaluation of the pilot maintenanceprogram for unpaved roads showed a NPV of US$ 6.9 million with an IRR of 22 percent. The roads sections with the highest benefits are Bokoro -Bitkine and the Bitkine - Mongo (IRR's of 38 percent and 21 percent respectively),which have higher traffic and are today in worst condition. The other road sections yielded an IRR of 10 percent, which indicatesthat in order to be economicallyjustified, these roads should receive somewhat lower maintenanceexpenditures than the assumed US$ 5,000 per km and year; the analysis of switching values indicates that these road sectionsshould receive in the order of US$ 4,600 per km and year to yield an IRR of 12 percent.

In conclusion,the proposedprogram is economicallyjustified, althoughthere are some road sectionswhich show marginal results when traditional evaluation methods are used, which take into consiceration exclusively VOC-related benefits. In addition, as explained earlier, in the case of the road paving subcomponentit is clear that the analysis understates the total VOC-related savings and a separate study shows that by including food security and potential value-addedbenefits, the IRR will exceed the usual threshold value of 12 percent. With respect to the road maintenancecomponent, the rate of return for some

- 19 - road sections is marginally below the 12 percent threshold;this result may in fact be used to somewhat lower the level of expenditureson those sections,thus calibratingthe programmingof work with service levels which are economicallyjustified. Finally, as noted earlier in this document,it is importantto view the Bank's contributionwithin the context of the entire sector investmentprogram, which aims to establish a logical and continuous backbone national road network. Although some irdividual links may by themselves not have a very high rate of return, the proposed program is justified as contributing to poverty-targetedNational TransportProgram which has been defined based on a set of nationallyaccepted socio-economiccriteria.

2. Financial(see Annex 4 and Annex 5): NPV=USS million; FRR = % (see Annex4)

Fiscal Impact: (i) The National Transport Program. Chad's indicative Ten-Year National Transport Program (2000-2009)identifies investmentsand expendituresof FCFA 473.5 billion, or US$ 720 million (excluding taxes). For the first tranche (2000-2004), the total new investment in the National Road Network is estimated at US$ 318.4 million, of which only 5 percent (US$ 15.9 million) will be contributed by the Government in the form of counterpart funds, while the remaining 95 percent will be financed through donors. Road maintenanceexpenditures for the same period are expectedto be US$ 59.0 million, of which roughly 75 percent will be raised locally through road user fees outside the regular Government budget (roughly US$ 44 million, equivalent US$ 8.8 million per year). Annual expenditures for institutional strengthening in the transport sector, and current operating costs of transport sector institutions are estimated at US$ 2.6 million and US$ 2.4 million, respectively, during the first tranche period. It is estimated only some 35 percent of these latter amounts are financed by the Government;most of the resourcesnecessary will be providedby donors in various forms.

(ii) SustainableRoad MaintenanceFinancing. The main financial issue of the transport sector involves the ability of the Govenunent to achieve a self-sustaininglevel of funding for road maintenance. This is crucial to the National Transport Strategy, and it is a pre-requisitefor the substantialdonor support during the years to come. Discussionsheld since 1998between the Ministry of Finance, the MTPTHU, the Bank and the IMF have confirmeda broad agreementthat maintenanceresources will be raised through road user fees, not taxes, and that these resources will be collected directly by the new Road Maintenance Fund, without passingthrough the Treasury. The new Road MaintenanceFund was prepared with Bank support and should be operationalby January 2001.

(iii) User Fee and Fuel Price Structure. The intended Road User Fee financingof the Road Maintenance Fund will require a revised structure for the price of fuel. A simulation model has been developed to determine the revised fuel price structure. Based on this model and the analysis of annual road maintenancefunding requirements,the amounts of the user fee will calculated as a fixed amount per liter sold (currently estimated to be in the order of FCFA 100 per liter), which will ensure full funding of estimatedannual road maintenancerequirements. As an interim solution,until the beginningof operations of a local oil refinery in Chad, a mixed revenue structurefor the FER has been adopted.

(iv) Overallfiscal impact. Assuming that a self-sustainingroad maintenancefinancing system can be put in place as planned,the implementationof the National Transport Program should bring about significant fiscal benefits. A well functioning Road Maintenance Fund, combined with the introduction of performance-basedroad maintenancecontracts, should bring about (i) a more efficientutilization of public

- 20 - and user fee-generatedfunds, (ii) lower transport costs and, (iii) in the longer term, a much reduced need for public funds for the rehabilitationof roads which were destroyed because of a lack of timely and adequate maintenance. As far as rural roads and access paths are concerned, it is expected that regional and local governmentexpenditures may increase due to decentralization. Here, the developmentof the Rural Roads Strategy with financing of PAProNaT and technical support from RTTP should also introduce concepts and methods that will enhance the efficient utilization of these funds, based on preventativemaintenance, minimum service levels and spot improvementapproaches.

3. Technical:

Technicalstudies for the investmentcomponents were initiatedearly during the project preparation,in part with financing under the ongoing Second Transport Sector Project. By August 2000, most studies have been completed. The relevant bidding documents for works are available. Major technical problems are not expected.

There have been two main challengeson the technical level. The first one has been the preparationof the bidding document for the performance-basedroad management and maintenance contract for unpaved roads. In this area, Bank staff, both technical and procurement,have been heavily involved, and this has allowed the client to prepare a high-qualitydocument with represents a new and innovativeapproach. The second one has been to develop an adequate structural design for all-season roads in Chad, where suitable roadbuildingmaterials are often not available. Here, experiencedengineers with specificknowledge of the chadian conditionswere hired to propose adequate solutions; in this case the so-called "inversestructure" was developedand is reflectedin the bidding documents. It is notedthat under the specificconditions large parts of Chad, road paving is in fact the least-cost solution,even if the relatively low traffic volumes do at first sight not justify paving. Past attempts to build and maintain unpaved roads for all-season access in some parts of Chad have failed quite badly.

In addition, particularattention has been paid to the definitionof suitableand economictechnical solutions for the strengtheningof existing paved roads in Chad; these solutions should extend the useful pavement life by at least six to seven years, while maintaining the average cost per kilometer at about FCFA 25 million (equivalentto US$ 40,000).

4. Institutional: a. Executingagencies: The Ministry of Public Works, Transport, Housing and Urban Development (MTPTHU) will have the overall responsibilityfor project coordinationand financialmanagement, with substantialsupport from the specialized ProjectCoordination Unit CISCP - Cellule Interministeriellede Suivi et de Coordinationdes Projets dans le Secteur des Transports (CISCP). This unit was created in 1989 and has successfully managed not only the ongoingSecond Transport SectorProject financed by the Bank, but also the previous PASET project and several other projects financed by other donors. The technical managementof some project componentsor activities will be delegatedby CISCP to two Directorates within the Ministry, in particular to (i) the Roads Directorate (DR) for the technical execution of the road investment and maintenancecomponents, and to (ii) the Directoratefor SurfaceTransport (DTS) for the implementationof the Traffic Safety Component. DTS will in turn cooperatewith the traffic police in matters of road safety. CISCP will maintainfinancial accountsfor the entire project.

- 21 - The Ministry of Economic Promotion and Development will execute the AIDS/HIV component of the project.

In spite of not being an executingagency for the PAProNaT,the new Road MaintenanceFund which has recently been created will receive special attention and technical supportthrough the project,because of its very important role in the overall institutional setup of the transport sector. Once the FER will be fully operational,which is expectedto be the case in January 2000), it will be a small unit under the umbrellaof the MTPTH-Uwhose role will be to collectand administerthe resourcespaid by road users. It will delegate the technical administrationand supervision of road managementand maintenancecontracts to the Roads Directorate of MTPTHU. However, the Road Maintenance Fund will exercise technical audit responsibilitiesprior to payment for works or maintenance services certified by the Roads Department. The law creating the Road Maintenance Fund has been adopted by Parliament in August 2000 and the by-laws were adopted in September2000.

The supportto be providedby PAProNaTto the Road MaintenanceFund will be.in the area of institutional capacity-building. This will include a combinationof long and shortterm technical assistanceto enable it to fulfill its twin mandate of (i) manager of public financial resources,accountable to the Governmentand the Public, and of (ii) technical auditor of road maintenance expenditures. Technical assistance to be provided is expectedto include a Road Maintenance Program Manager, who will initially work full time with the Agency in establishingthe funds managementand technical audit systems. This expert will be complementedby short term specialists,to be recruited on an as-needed basis, as well as accountingand financial auditingassistance from an internationalauditing firm. Followingthe first two years, the Senior Road Maintenance Program Manager will carry out periodic short term support missions, with continued shortterm assistance as required. b. Projectmanagement: In general, the MTPTHIIUand in particular the CISCP have demonstratedin practice their financial and project managementcapacity, on the occasion of the ongoing Second Transport Sector Project and several other projects. In comparisonwith other GovernmentMinistries in Chad, it is relatively well equippedand has competent staff which have been on their job for several years. Under the proposedproject, additional institutionalstrengthening will take place, including (i) training of new and younger staff, (ii) purchase of office equipment and vehicles, and (iii) studies and technical assistance of various types, such as procurement and contract management, and financial management. Based on the capacity assessment carried out during the pre-appraisalmission in January 2000, an action plan was agreed to address areas where the existing structures still need to be strengthenedto meet performance criteria for PMR-based disbursement. The action plan - see capacity assessmentin annex 6 - includes: (a) in the area of financial management: (i) the issuance of a Project Implementationand Procedures Manual and the selectionof a financial auditor before credit effectiveness; (ii) the installation of a management and accounting computerizedsystem -- includingcontract management; and (iii) the training of project staff for using the new procedures; and (b) in the area of procurementand contractmanagement: (i) a procurementplanning and contract managementsystem, integrated into the above-mentionedfinancial management system; (ii) a sectionon procurementin the Project Implementationand ProceduresManual; (iii) the recruitmentof firm to provide technical assistanceto the Legal and ProcurementUnit of MTPTHUduring the first projectyear for developing the capacity to assist project components and exercise quality control and mandatory reviews of all procurementdocuments; (iv) the selectionof a technical auditor before credit effectiveness; (v) the reorganization of the filing of procurement-relateddocuments; and (vi) procurement training sessionsbefore credit effectiveness.

In addition, with financing from the PPF an organizationalstudy will be carried out to identify specific

- 22 - training and strengtheningneeds duringthe coming years to meet the work programsof not only the various Directorates within MTPTHU, but also of the private sector (such as engineering consultants and contractors) and of certain NGOs (such as training through the Transporters' Unions and the Taxi Owner Association).

Given the relatively small scope of the HIV/AIDS component,and consideringthe proven capabilitiesof the Managersof the Programme National de Lutte contre le SIDA in which it will be embedded,it can be assumed that project managementcapacity will not be a constraintfor the implementationof the HIV/AIDS componentof the project.

5. Social: As has been explained in sectionA of the present document,given Chad's internal and external isolation,it has become very clear that establishing a minimum reliable national road system is a fundamental pre-requisite for reducing the extreme poverty that plagues a very large share of the population. A dependable and well-maintainednational road network, even if it is relatively small, will open the possibilities for rural produce to reach beyond local markets, which can act as collecting points for transport to urban centers and other regions of the country. Moreover, without the most basic national arteries, agricultural inputs, consumer goods and improved services, such as potable water, health and educationalservices cannot efficientlyreach the rural poor.

Chad's Poverty Assessmentcites a number of cases and studieswhere the lack of year round access weighs heavily on prospects for poverty reduction. These cases and studies provide evidencethat seasonal lack of access prevents foodstuffs from reaching markets in the rainy season, or-that inordinatelyhigh transport costs lead to both higher consumer prices and lower producerprices (Chad Poverty Assessment, page 18). The project will contribute to reducing rural poverty by: (i) safeguardingyear-round basic access of the rural poor to markets and services(social and administrative),(ii) loweringthe cost of such access through the provision of a well-maintainedand dependable basic backboneroad network linking rural and urban areas, and different regions among each other; and (iii) reducing the vulnerability of the rural poor, especiallyof women and children,by improvingfood security during droughtsand famines.

In order to ensure that the rural poor will indeed benefit from investmentsin the nationalroad network, the PAProNat will assist in the developmentof a National Strategy for Rural Transport. This will be done through the Bank-supportedregional Rural Travel and Transport Program (RTTP), which will initiate a participatoryprocess on how best to create an enabling environmentand utilize externaland local resources for improving rural accessibility. Through this program, local communities and stakeholders will be assisted in finding ways to improve their access to the national network, under the framework for decentralizedresponsibility, and through programs to improve access to non-motorizedand intermediate forms of transport. Additionally,the Bank will also provide support in this area through two new and separate lendingoperations, outside the transport sector as such (Rural InfrastructureProject, and Capacity Building Projectin the Doba Region).

Finally, it should be added that removing the critical transport constraint is only a necessary, but not sufficientcondition for improvingthe social and economic welfare of the population. Such improvements will also require complementaryinvestments in areas such as health, education and development of the rural economy. Such interventionsform the other elementsand priority areas of the recent CAS for Chad. It is important to state that the National Transport Program, and in consequencealso the PAProNaT have been defined in close coordination between all key sectors, including the social sectors, and that the achievement of objectives in the social sectors is closely linked to the implementationof the National

-23 - Transport Program.

6. Environmentalassessment: EnvironmentCategory: B (Partial Assessment) Overview

Since the purpose of PAProNaT is to provide support to the National Transport Program, the environmental impact assessment was carried out in three parts: first, a broad, programmatic type assessmentwas made for the National Transport Program;the second part focused on two sub-components of PAProNaT (Road Upgradingand Paving and Performance-BasedRoad Management and Maintenance for Unpaved Roads); and the third involved the Paving of the Ngoura-Bokoro Road, of which the PAProNaTwill finance a section.

The first part was an update of the original environmentalstudy carried out in the context of the National Transport Sector Strategy. It provides an overview of the major impacts expected in the road and air transport sectors and recommends a set of generic mitigation and enhancement measures, as well as institutionalstrengthening. As such, it servesas a guidepost for environmentalassessments which are to be carried out for future individual investments(mostly financed by other donors as part of other projects), and a checklist-typetool for the Ministry of Transport to evaluatethe ensuingEA's.

The second and third parts focus on the actual investmentsto be financedthrough PAProNaT,and provide more site-specificrecommendations for mitigation. They include a specific EnvironmentalManagement Plan for the physical works to be financed under the PAProNaT. The major issues and mitigation measuresdescribed below relate to the latter two parts, while institutionalarrangements are drawn from the first part.

Major issues:

The major types of investmentsto financed under PAProNaTare:

* Strengthening of existing bituminous pavements through pavement sealing or overlay, without wideningthe road or changingroad alignments(up to a max. of 284 km) * Maintainingexisting unpaved gravel and earth roads, without changing road alignments(443 km) * Upgradingan existing unpavedroad to paved standard(104 km)

All the above investments involve rehabilitation,maintenance and improvementsto existing roads. The planned works do not call for any change in alignments, although there will be an increase in the embankmentsalong certain sections, as a result of topographicand drainage conditions. The roads to be improved are located in the Sahelien zone, with rainfall between 350 and 400 mm. The population is sparselydispersed, with density varying from 4 to 20 persons/sqkm. The environmentalimpact assessment identifies potential negativeand positive impacts, which may occur during the constructionand operations (post-construction)phases, categorizedby natural and human milieu.

During the construction phase, the potential negative impacts are considered to be relatively minor and mostly temporary. They relate to:

* Construction camps, potentially responsible for soil erosion and vegetation loss from uncontrolled clearings, subsurface pollution from human waste and construction materials (such as bitumen),

- 24 - increased risk of socially transmitted diseases; potential accidents; wildlife loss from hunting and temporarynoise and air pollution from constructionmachines. * Borrow areas, which can potentially bring about soil erosion and changes in the local hydrological regime; loss of vegetationcover; wildlifedisturbance and potentialaccidents. * Constructionsites, which can bring about similar effects on soil, water, vegetation and air resources along the right of way, as well as risks of sociallytransmitted diseases and accidents.

No major cultural resources were identified as being endangeredby the proposed road improvements.No findingsof archaeologicalartifacts have been reportedin the area of the project roads, and the likelihoodof findingsis estimatedto be low. Studies have shown that road improvements,although facilitatingaccess and reducingtravel time for existing communities,would not result in increased colonizationpressures in remote areas, underthe specific conditionsof the project's areas of influence.

Potential positive impacts identified during the constructionphase include increased commercialactivity and employmentcreation.

Duringthe operationsphase, the main potentialnegative impactsinclude:

* Disturbanceof the hydrologicalregimes and erosion from poorly designedembankments. * Erosion, loss of vegetation and health concernsfrom non-rehabilitatedborrow areas. * Potentialpollutants in the air and from runoff, as a result of increasedtraffic levels. * Potentialaccidents resulting from increasedtraffic levels and speed. * Potentialincreases in socially-transmitteddiseases due to increasedcommunications.

Numerouspotential positive impacts were identifiedin the human milieu, including:

* Increasedopportunity for commercialactivities and potentialemployment due to year round access. * Reductionin the cost of transport, and less fluctuationsduring the year in the prices of basic consumer goods. X Improvedaccess to agriculturalinputs and marketing services. X Improvedaccess to health, education and administrativeservices.

Mitigation

Four types of mitigationmeasures are specified:

* Participatory processes. This will include first, the announcement of the availability of the environmental impact assessment for public comment, both in N'Djamena and in the local administrativeunits concerned. Second, public consultationwill be conductedin the populated areas through which the roads pass. * Environmentalclauses in constructioncontracts. Most of the potential impacts identified can be mitigatedthrough the incorporationof clauses related to "good engineeringpractice," as well as some specificenvironmental concerns. These will be incorporatedsystematically into all bidding documents and form part of the contractual obligation of the contractors. * Environmentaland social safeguardsin design. These will involve road design measures related to such concerns as road safety, special parking areas and cattle crossings, which may arise from the public consultations. * Other measures, such as anti-AIDS campaigns and potential resettlement. The HIV/AIDS component of PAProNaT will finance information campaigns along roadways and will provide an

- 25 - institutionalframework to address this issue along the projectand other roads. Regardingresettlement, the Road Paving and Service Level Management and Maintenancestudies indicated no requirements for land expropriationor resettlement,as these works are along existing alignments with sufficient rights of way. Althoughthe original study and complementarynote on the Ngoura-BokoroRoad allude to potential displacement,the appraisal mission team visited the road in April 2000 and observed that no resettlementor potentialdisplacement will take place.

Environmental Management Plan

Based on the environmentalimpact studies, the Governmenthas established (i) a template Environmental ManagementPlan (EMP), and (ii) specific EnvironmentalManagement Plans for the investmentsto be financed under PAProNaT. The PAProNaT Environmental Management Plans will concem the three infrastructure development components, and will include environmental mitigation and monitoring measures, as well as institutionalresponsibilities. This EMP will also constitute a model for all future transport investmentsto be implementedthrough the National Transport Plan. Institutionalstrengthening will be financed under the PAProNaTto help MTPTHUto effectivelyprepare EnvironmentalManagement Plans for future investmentsand to implementsuch plans.

Institutional arrangements

The environmentalmanagement plan will be implementedthrough the MTPTHUEnvironmental Unit. This unit will coordinate its efforts with the Ministry of Environmentand be responsiblefor ensuring that the proposed mitigation measures are implemented and monitored. For the major physical works to be financed under PAProNaT, it will create a Technical Committee which will supervise and monitor the practical implementationof the EnvironmentalManagement Plan. The Technical Committee will include participation from the Ministry of Environment and the Ministry of Public Health, as described in the Environmental Assessment. Responsibilities will include: (i) monitoring and documentation of all environmentalimpact assessmentsfor the National Transport Plan; (ii) ensuring the public participation processes; (iii) monitoring the incorporationand implementationof environmental clauses and design considerations;and (iv) coordinating other measures, in conformance with national regulations, Bank regulations and Safeguard Policies and those of other donors, when necessary. This unit will require additional training in environmental assessment, management and monitoring. This institutional strengtheningwill be included as part of the institutionalstrengthening component of the project. It is envisionedthat a local NGO will be engaged to carry out facilitationof the local consultationsand organize AIDS awarenesscampaigns and other complementarymitigation measures.

7. ParticipatoryApproach (key stakeholders,how involved,and what they have influencedor may influence;if participatoryapproach not used, describe why not applicable): a. Primary beneficiariesand other affectedgroups: The project design clearly focuses on poverty-alleviationthrough facilitatinga reliable transport system on the main road network. This deliberatechoice, which may at first sight appear to be contrary to the trend followed in many other countries, was based on the clear results of numerous and very extensive participatory consultationsin Chad during 1998 and 1999, both in rural and urban areas throughout the country. Those consultationswere carried out on several levels,as shown below.

* On the Macro level, in the context of (i) the CAS preparation,(ii) the Chad Poverty Study, (iii) the Country Portfolio Performance Review and (iv) the Survey on the Quality of Supervision of

- 26 - Bank-financedprojects. * On the Sector level, in the contextof the preparationof the National Transport SectorStrategy and the National Transport Program. * On the Project level, in the context of (i) a participatoryproject planning workshop (ZOPP), and (ii) specific consultationsin ten villagesthroughout Chad which were carried out as part of the preparation of the new Bank-financedRural InfrastructureProject.

The consultationsprovided several clear messages,which were taken into account during project design:

* Village populationsare mostly able to access other villages and the main road network, by utilizingthe very extensive network of access paths which have developed over time. Interruptions occur sometimes, especially because of accumulationsof water during the rainy season, but are usually of a relatively short nature. * Much more serious problems are caused by the regular interruptionof the main road network during and after the rainy season, for periods of several months. Local production cannot be brought to regionalor urban markets, and goods coming from those markets do not reach many of the rural areas, causing losses and suffering. * Although overall food productionin Chad is generally sufficient, erratic rainfall patterns cause local famines. Food security is adversely affected by interruptedmain roads and the resulting inability to transport food between food surplus and deficit areas. * Even with very substantial donor support, the Government clearly does not have the financial and human resources to provide both nationwide support for Rural Travel and Transport, and a reliable National Road Network. * If a choice has to be made, preference must be given to the provision of a minimal, but reliable National backboneroad network.

The key stakeholdersat the consultationsand workshopsincluded:

* Delegations from MTPTHU, Ministry of Finance, Ministry of Interior, Ministry of Education, Ministry of Agriculture, Ministry of the Army and Re-Insertion, Ministry of Communicationsand Ministry of Public Health * Trucker and ForwarderAssociations * NGO's including SECADEV,L'ACORD, numerous women's groups, and agricultural and livestock associations * Villagecommunities * Donors, such as GTZ and Swiss Cooperation * Developmentprojects, such as PSAP,PSANG and SODELAC

Further consultationshave been carried out to arrive at a consensus on the logical framework for the national program. The logical framework for PAProNaT reflects the overall logical framework for the National Transport Program.

b. Other key stakeholders: Trucker Unions: The Bank and the MTPTHU have discussedon severaloccasions the issue of Road User Fees included in the fuel price with the two major associationsof transporters. They are supportive of this solution, since it would involve a more equitable distribution of costs for road maintenance over all road users, and not mostly through levies on international freight transporters, as is currently the case.

- 27 - Representatives of the transporters will participate in the Supervision Board of the Road Maintenance Fund.

Ministry of Finance and Customs Bureau: The Bank and MTPTHU have organized several roundtable discussionson the issue of the Road MaintenanceFund and the levels of Road User Fees with the Ministry of Finance and the Customs Bureau, in connectionwith the revised fuel price structureand the application of the TVA. Fuel Distributors: Also participating in the above discussions have been representatives from the petroleumproducts industry.

F. Sustainabilityand Risks 1. Sustainability: It is critical for the sustainabilityof the National Transport Program that the new Road Maintenance Fund be operated independentlyfrom the Governmentbudget and that its revenue base be sufficientto finance at least the routine maintenance of the national road network. During the Transport Sector Round Table meetingin 1999, the Government committeditself to that objective. At the same time, the various Donors present at the Round Table made it clear that they are willing to provide substantialfinancing for the transport sector, but only if the Governmentactually implementsthe Road MaintenanceFund as proposed, and that the resources generated are at least sufficient to finance the routine maintenance of the National Road Network.

2. CriticalRisks (reflectingthe failureof critical assumptionsfound in the fourth column of Annex 1): Risk Risk Rating Risk Mitigation Measure FromOutputs to Objective Other donors providefunding to National M Regular donor coordination. TransportProgram as committed. Road MaintenanceFunding is adequate. M Closemonitoring of Road MaintenanceFund. Road Transport Industry has sufficient N Continueddialog with transport operators. incentiveto offer better services as a result of improvedroad conditions. Overall politicalstability and internal and S externalpeace.

FromComponents to Outputs Governmentcontinues to support reform N Policydialog needs to be maintained. policy in the road sector. Contractorsare willing to bid for M Good informationto be providedto potential perfornance-basedroad managementand bidders. maintenancecontracts.

OverallRisk Rating M RiskRating - H (High Risk),S (SubstantialRisk), M (ModestRisk), N(Negligible or LowRisk)

3. PossibleControversial Aspects: The creation of the Road MaintenanceFund involves not only the transport sector. Since the Road User Fees to be collectedare consideredpublic funds, the Ministry of Finance has a role to play in the oversight

- 28 - of the efficient use of those funds. In addition, a continued full agreement is needed between the Government,the macroeconomicstaff of the Bank and the IMF, in order to assure conceptualsupport to the FER and the compatibilityof the FER with macroeconomicand fiscal policieswhich are the basis of cooperation through structural adjustment lending and similar macroeconomicprograms. During the preparation of PAProNaT, very substantial efforts were made to ensure a joint approach on Road MaintenanceFinancing, between the Government,the IMF and the Bank's macroeconomicand transport sectorstaff. As a result,there is today an agreementamong these parties.

G. Main Credit Conditions 1. EffectivenessConditions The proposedconditions of effectivenessare: * The Project Account has been opened and an initial contribution of CFAF 30,000,000 has been depositedtherein. * The Project Implementation and Procedures Manual, in form and substance satisfactory to the Association,has been adopted and transmittedto IDA. * The technicaland financialauditors have been appointed. * The members of the ManagementCommittee, the Director and the Chief Accountant of the Road MaintenanceFund have been appointedin conformitywith the FER statutes. * The validityof special procurementregime for MTPTHU/CISCPhas been extendedfor the purpose of implementingthe Project.

2. Other [classifyaccording to covenanttypes used in the Legal Agreements.]

9 Qualifications,experience and performanceof staff within MTPTHU and the Ministry of Economic Promotionand Development,in charge of the implementationof the Proejct, shall be satisfactoryto the Association. * The FER Director, Chief Accountantand those members of the ManagementCommittee of FER who are appointed by the Borrower or any of its agencies, shall be appointed in accordance with the provisionsof the law and decrees applicableto FER. 3 FERshall carry out its mandate in compliancewith the law and decrees applicableto the FER. 3 CISCP shall maintain a qualifiedCoordinator, Deputy Coordinator and Chief Accountant. 3 CISCPshall carry out its mandatein accordancewith the decree establishingCISCP. * Otherrelevant Govemment Ministries,Agencies and Authoritiesshall collaboratewith MTPTHUand Ministryof EconomicPromotion and Developmentto ensure the proper implementationof the project. * The Borrowershall apply the ProjectImplementation and ProceduresManual. * The Borrower shall not amend or waive the Environmental Management Plan or the Project Implementationand ProceduresManual in a manner which in the opinion of IDA may adverselyaffect the implementationof the project. * Other standard conditions on Special Accounts, Audits, Reporting, Monitoring, etc. as shown in Schedule4 of the DCA.

- 29 - H. Readinessfor Implementation

0 1. a) The engineeringdesign documentsfor the first year's activitiesare completeand ready for the start of project implementation. 0 1. b) Not applicable.

* 2. The procurementdocuments for the first year's activitiesare completeand ready for the start of projectimplementation. X 3. The Project ImplementationPlan has been appraisedand found to be realistic and of satisfactory quality. D 4. The followingitems are lackingand are discussedunder loan conditions(Section G):

1. Compliancewith Bank Policies Z 1. This project complieswith all applicableBank policies. El 2. The followingexceptions to Bank policiesare recommendedfor approval. The projectcomplies with all other applicableBank policies.

AndreasSchliessler Ma.'t0 1 ssis-Fraissard Robert Calderisi Team Leader Seor Manager Country Director

- 30 - Annex 1: Project Design Summary CHAD: National Transport ProgramSupport Project

IiIparch or becie I dicators Monito0ng EvaNlufaio Critcl sjwpI Sector-relatedCAS Goal: SectorIndicatos: Sector/country reports: (fromGoal to BankMission) Sector-relatedCAS Goal: Sector Indicators: Sector / Country Reports: (from Goal to Bank Mission) Infrastructureconstraints to 1I.1Annual GDP growth CAS reviews, ESW, and I .Socialservices (education, private sector-ledgrowth exceeds5%. studies carried out through health, extension,et.al.) are and poverty alleviation 1.2 Poverty Indicators the project. improved. removed. improvedas comparedto 2. Governmentremains 1999 CAS base data. committedto private sector developmentand creates enablingenvironment.

ProjectDevelopment OutcomeI Impact Projectreports: (fromObjective to Goal) Objective: Indicator: Project Development Objective: 1.1 10% decrease in 1.1.1 Comparisonof market 1.Other infrastructure Improved year-round averagerates in real terms rates at appraisal (PAD) projects and programs access to markets and for goodsand passenger and at end of project. achievetheir goals. servicesthrough a more transport(measured in price efficient transportsystem per ton- and passenger-km and better transport respectively)for transports services. betweenthe provincial capitalsin the east of Chad and N'Djamena between 1999 and end of 2005. 1.2 All-seasonrideability 1.2.1 Sector reviewsand 2.1nfrastructureremains an for 1800km of all-year inspectionvisits. integral part of Government' naticonalroad network s overallobjectives. achievedby end of 2005. 1.3 At least 55% of 1.3.1 Sectorreviews and 3.Enablingenvironment for National all-year road inspectionvisits. PPI. networkin good or fair 1.3.2 MTPTHU data. conditionduring dry season, by end of 2005.

- 31 - Outputfrom each OutputIndicators: Projectreports: (fromOutputs to Objective) Component: I .Roadsare rehabilitated 1.1 Approx. 100km of Project Reports: 1.1 Other donors for Third and upgraded to paved roads are upgraded to paved PIU progress reports Transport Sector Program standard. standardby end 2004. WB supervisionreports providefunds as committed. WB ICR 1.2 Road strengthening 1.2 Road transport industry carried out for at least 200 has sufficientfinancial km of paved roads by end incentiveto offer better 2004. servicesas a result of improvedroad conditions.

2.Roads in the pilot area are 2.1 Road managementand 2. Road maintenance well-maintainedunder maintenance contract fundingis adequate. performance-basedroad awardedby end of 2001. managementand maintenancecontracts. 2.2 Averagetravel speed of a 2-wheel-drivecar of 50 km/h at all times, by end of 2005 and thereafteron the all-seasonNational Road Network.

3.Roadsafety improvements 3.1 First awareness in urban areas. campaignimplemented by end of 2003.

3.2 AccidentData collection and monitoringsystem implementedby end of 2002.

4. Rural transport 4.1 Rural Transport improvementsare planned Strategydeveloped by end of 2003. 5.Managementof roads 5.1 Second-generationRoad 5. PrivateSector participates reformed in a sustainable MaintenanceFund and Board constructivelyin Road way- fullyfunctional by mid-2001. MaintenanceFund Board.

- 32 - . KbyPbiki_ce Hierarchy of _c ______on___lylen______ProjectComponents / Inputs:(budget for each Projectreports: (fromComponents to Sub-components: component) Outputs) I .Road Investment 1.1 US$ 60.90 million PIU progressreports I .Governmentcontinues to WB supervisionreports supportreform policy in the WB ICR road sector. 2.PilotProgram for 2.1 US$ 19.57million 2.Contractorsare willingto Performance-Based bid for performance-based MaintenanceContracts road maintenancecontracts. 3.RoadSafety Component 3.1 US$ 2.04 million 4. RuralTransport Strategy 4.1 US$ 1.24million Development 5.InstitutionalSupport 5.1 US$ 6.27 million 6. HIV/AIDSand Transport 6.1 US$ 0.5 million

PPF: US$ 0.5 million

- 33 - Annex 2: Detailed ProjectDescription CHAD: NationalTransport Program Support Project

The project comprisessix components,namely (i) Road Investment,(ii) Road MaintenancePilot Program, (iii) Road Safety, (iv) Rural Transport Strategy Development,(v) Institutional Support and Capacity Building,and (vi) HIV/AIDSand Transport. A descriptionof each componentis given below.

By Component: ProjectComponent 1 - US$60.90million

Road Investment

1.1 Rationale and objective

The objectiveof this component is to support Chad's national road investmentprogram as the "donor of last resort", by financing the rehabilitationor upgrading of key links in the National Road Network for which other sourcesof fundinghave not been secured.

The Government of Chad has established a National Transport Sector Program (1999-2009) which was presentedto the donor communityin November 1999. The Program is based on a transportsector strategy which emphasizesa network approach;it focuses on consolidatingthe core National Road Network while allowing for rural access improvementsto be carried out through decentralizedauthorities and specific local development programs, mostly outside the transport sector as such. A multi-criteria and multi-sectoralscreening process was used to identifythe core National Road Network totaling 6,200 km and consisting of some 2,600 km of all-year-roundroads and some 3,600 km of dry-season-onlyroads. Besides the core National Road Network,there are about 3,000 km of regional roads and in the order of 30,000 km of local access paths.

The National Transport Program will thus focus the limitedresources available in the transport sector on ensuring the a minimal, but reliable National Road Network of a total of 6.200 km. This will include investments in the upgrading and paving of all-season roads, the protection and strengthening of the existing paved roads, and expendituresfor maintenanceof the entire National Road Network. The major road investmentswill be financed by various donors and will involve (i) the rehabilitationand paving of the main east-west and north-south axes, (ii) the rehabilitation of key existing paved roads, and (iii) the constructionor rehabilitationof key bridges and structures. The Program will also support improvements to the regionalroads and local access path networksthrough local initiatives(see institutionalstrengthening and rural transportstrategy componentsbelow).

Following the donor's roundtable meeting in November 1999, commitmentsby various donors for the proposed road investmentswere confirmed, totaling close to US$ 380 million. In order to ensure the coherent developmentof the National Road Network, the Bank will supplement these resourcesthrough PAProNaT with selected investments in the paving and rehabilitationprogram, especially in those road sectionswhich are essentialbut for which other types of financinghave not been identified.

1.2 Description

The road investmentcomponent has two sub-components,which are (i) road upgradingand paving,and (ii)

- 34 - strengtheningof existingpaved roads.

The sub-componentRoad Upgradingand Paving has a total cost of US$ 32.84 million includingtaxes. It will allow to improvethe Ngoura-Bokororoad from an unpaved road in poor condition which is blocked during several months of the year, to a paved all-season road. It is emphasized that this road is a key section on the main east-west axis of the country, from N'Djamena to Abeche. The sub-component includestwo major activitieswhich are civil works and works supervision.

Civil Works: TheNgoura-Bokoro road is 104 km in length and is located in the Region of ChariBaguirimi. Works will consistof rebuildingthe road alongthe existingalignment. The height of the road will be raised to deal with flooding problems which in the past have interruptedtraffic for several months every year. The project will involve earthwork, pavement works and transversal drainage structures of various dimensions. There are no major crossingsalong this stretch. The paved sectionwill be 7 meterswide, with 2.5 % lateral slope and shouldersof 1.0 meters. Due to the unavailabilityof good materialsfor the road base, it has been decidedto applythe "inversestructure" design conceptand to seal the shoulders.

WorksSupervision: PAProNaTwill finance the contract for the supervisionof those works financedunder the project;the cost is estimatedto be US$ 2.7 million includingtaxes.

The sub-componentRehabilitation of existing Paved Roads is estimatedto cost US$24 million including taxes. The specificobjective of this sub-componentis to extendthe useful life of the existingpavements on the entire length of Chad's paved roads (except urban roads and streets). Most of those roads were paved some 8 years ago and are still in reasonably good condition, but show increasing signs of aging and advancingdeterioration.

Civil Works: An average investment in the order of US$ 40.000 per km for the strengtheningof the existing pavementsis likely to ensure good road conditionsfor the next 6 to 7 years. The particularroad sectionsto be includedunder this sub-componentare (i) N'Djamena- Guelendeng(144 km) at a likely cost of US$ 4.6 million; this section is heavily traveled as it constitutesthe only entry and exit to N'Djamema from the south; (ii) N'Djamena - Djermaya(27 km) at a likely cost of US$ 2.9 million, this sectionis also heavily traveledas it constitutesthe only entry and exit to N'Djamena from to the north; (iii) Djermaya- Dandi and ramifications(89 km) at a likely cost of US$ 4.2 million,this section is the continuationof the N'Djamena - Djermayaroad to the north towards the agriculturalareas at Lake Chad; and (iv) Walia - N' Gueli Bridge, including the N'Djamena bypass road (27 km) at a likely cost of US$ 1.3 million, which connectthe northernand southernaccesses to N'Djamena with each other.

WorksSupervision: PAProNaT will finance consultingservices for works supervisionat an estimatedcost of US$ 1,35million includingtaxes.

1.3 ImplementationArrangements

The technical implementingagency (maitre d'oeuvre) for the Road Investment component will be the Roads Directorate(DR) of MTPTHU,through its Sub-Directorateof Road Construction (Sous-Direction des Travaux Neufs). The technicalresponsibility covers the design,planning and executionof works. All physical works will be executed through private contractors which will be retained under intemational biddingprocedures according to Bank procurementguidelines.

1.4 Budget

- 35 - The estimatedbudget for this componentis as follows:

1.1. Paving Works N'Goura-Bokoro 32.84 23.64 Supervision 2.7 2.2

1.2. Rehabilitation Civil Works 24.01 17.28 Supervision 1.35 1.14

Total 60.90 44.26

ProjectComponent 2 - US$19.57million

Pilot Program for Performance-basedRoad Managementand MaintenanceContract for unpaved roads

2.1 Objectiveand rationale

The objective of this component is to test and adapt a new approach for assuring cost-effective road maintenanceon the National Road Networkthrough a service-levelapproach. The lack of effective routine maintenance has always been the "Achille's heel" of the road maintenancesystem in Chad. This is an activity which requires constant management,and regular, well-timed interventions. The studies carried out for the definition of the national transport strategy in Chad showed that it would take approximately US$ 34 million per year to carry out effectiveroutine maintenanceon all of the approximately30,000 + km of roads in Chad. As this is unrealistic in view of the country's limited resources, it was decided in the national strategy to concentrate maintenanceefforts on a priority core national network of approximately 6,200 km, which is calibrated to an annual overall maintenance budget of approximatelyUS$ 10 - 12 million.

The road maintenanceprogram during the Second Transport Sector Project (PST2) sufferednot only from irregular and almost erratic supply of funds, but also from an outdated approach that does not provide proper incentivesto ensure that roads are useable on a constant basis. This older approach is characterized by Governmentprogramming of specific repair works, the contracting out of those works to contractors, and the payments to contractors according to the volume of works carried out. This system has had various undesiredconsequences. First, programmingof maintenanceworks is based on predictions of what type of deteriorationwould likely occur in the future and where. Reality has shown that those predictions are often wrong, and when works are finally executed,they do not correspondto the true needs at that time. In spite of works being executed as planned, roads may still be interruptedat places where no works were foreseen. Second,contractors have the perverse incentiveto carry out as much works as possible on the shortest possible road sections. For them, a pothole developing into a "swamp" is a very good thing, because they can then carry out significant works and generate more revenue. A bad road is "good business",while a good road is "bad business". Third, even if the maintenancebudget is available and spent, it may still not mean that the roads are good. The typical situation, in Chad and many other

- 36 - countries,has been that maintenancemeans in practice "chasing after" already deterioratedroad sections, and little or no preventativemaintenance activities are carried out. As a result, the common perception is that money is being spent but the results are unsatisfactory.

In view of this situation,the Governmentand the Bank have embarked on a new approachto carrying out road maintenance. This new approach is based on the principle that roads should essentially provide certain levels of service to road users. These servicelevels can be defined in terms of average speed, riding comfort and certain physical features of the road. Under the new system, there will be contracts between the Road Agency and private entrepreneurs,in which the entrepreneurwill commit himself to providethose service levels. In turn, he will be paid a certain fixed monthly amount of money if he complies with the contract. He will have completefreedom to determine (i) what to do, (ii) how to do, (iii) when to do, and (iv) where to do the necessaryphysical interventionsin order to provide the agreed level of service. This type of contract has been used elsewhere, mainly in Latin America, but only for paved roads. In the context of this project, this concept will be applied to unpaved roads for the first time. It should provide incentives for contractors to maintain the prescribed service levels in a cost-effective manner and on a permanentbasis as long as the contractis valid, which in this case will be four years.

2.2 Description

The pilot project will be carried out on selected unpaved sections of the National Road Network totaling 441 km. The sections are adjacentto each other and form a continuousstretch on the main east-west road axis between NDjamena and Abeche: (i) Bokoro-Bitkine- 143 km; (ii) Bitkine-Mongo- 59 kin; (iii) Mongo-Mangalme - 129 kin; and (iv) Mangalme-Oum Hadjer - 110 km.

Much effort and preparation work has been put into the drafting of the model contract and bidding documents, both by the Government and the Bank. On the Bank side, both technical specialists and procurementexperts have participated. The contract contains the followingbasic principles:

The main objective is to attain and maintain prescribed service levels on a well-defined road networkduring a specificperiod of time (in this case 4 years). * The contractor is responsiblefor assuring four basic criteria: (i) year-round passabilityfor certain types of vehicles;(ii) the possibilityto travel at a certain average speed; (iii) a certain well-defined level of user comfort, and (iv) the durability of the road, in terms of assuring the protection of existing civil works, structures and other assets. * During the initial period of the contract the service levels will gradually be increased, in order to arrive at their final and highest level after roughly 21 months; those levels are then to be maintaineduntil the end of the contract. * Payments to the contractorwill be fixed equal monthly amounts during the entire duration of the contract(a price adjustmentformula will however be applied to offset normal cost increases due to inflation,etc.). * The contractor will have to provide performance guarantees which are only returned after the successfulcompletion of the contract. * Penalties will be applied if service level criteria are not met; and the contract may be canceled entirelyif deficienciesare not remedied after certain maximumperiods.

2.3 ImplementationArrangements

The responsibilityfor the technical preparation and execution of this component will be with the Roads Directorate,through its Sub-Directoratefor Road Maintenance,both part of the MTPTHU. The financial

- 37 - control will be executed by the Ministry's Project Management Unit CISCP, who will also make all payments to the contractor, and who will also carry out technical audits of the component. The pilot contracts will be let through internationalbidding procedures,in conformancewith Bank regulations,and pre-qualificationof bidders will take place. It should be noted that substantialtechnical assistance as been used to assist the Governmentin the initial establishmentof the model contract and to ensure that all parties concernedunderstand the new conceptof service-levelmaintenance.

2.4 Budget

The budget for this component is based on estimatedannual costs over a four-year period (incl. taxes and contingencies):

2. Pilot Maintenance Program Civil Works 18.18 13.08 Supervision 1.39 1.15

Total 19.57 14.23

ProjectComponent 3 - US$2.04 million

Road SafetyComponent

3.1 Objectives

In spite of the rather low motorizationrates and road traffic densities in Chad, traffic accidents claim a large numberof lives every year and cause many seriousinjuries to motorists, passengers,pedestrians and users of non-motorizedmeans of transport. While there is no detailed and reliable information on the actual number of traffic accidents and its victims, the seriousness of the Road Safety problem is well recognized,both in the Governmentand in the generalpopulation. It has therefore been decidedto include a Road SafetyComponent into the PAProNaT.

The overall objective of this component is to get the Road Safety issue on the National agenda and to initiate concreteactions aimed at improvingRoad Safety. Specificgoals and activitiesare: * to establish a basic institutionalcapacity to plan and implementa National Road Safety Program; throughtraining and technicalassistance; * to create an increased awareness of road safety issues among the general population and in particular among certain target groups, through communicationand sensitization campaigns for users, in particularwith operator and users of mixed cargo/passengertransport; * to make physical improvementsto a limited number of known "dangerousspots" mainly in urban areas.

3.1.1 Global and Regional Setting

Available statisticsshow that globallysome 500,000 people die, and between 10 and 20 million people are injuredeach year in traffic accidents. Seventypercent of these accidents occur in the developedworld. In Africa, road accidentsincreased by 350 percent between 1968 and 1990, and constitutethe second leading

- 38 - cause of death among people 5 to 44 years of age. In Addis Ababa, childrenless than 15 years accountfor 32% of the deaths,while in Abidjan,this rises to 40%.

While industrializedcountries have been addressingthis problem with significantroad safety measures, road safety is generallynot viewed as an urgentproblem in Africa; this despitethe rise in traffic accidents, a by-productof urbanizationand the rising numberof vehicles,all of which are consequencesof economic and social development. Several exceptions include some anglophonecountries, such as South Africa, Kenya, Tanzaniaand Zimbabwe;and francophonecountries such as Benin and Cote d'lvoire, where Road Safety has becomean issue on the national agenda..

3.1.2 Road Safety in Chad

Road safety in Chad is a serious problem. The statistics currently available through the Directorateof Surface Transport(DTS) and the Police indicate that there is an averageof 500 accidents per year. If one considers that there are only roughly40,000 registeredmotor vehicles in Chad, this is indeedan alarning accident rate. According to the statistics available, N'Djamena alone accounts for 95 percent of the country's accidents;the statistics may however not reflect many accidents in rural areas, most of which are simply not registereduntil now. Within the capital city, 39 percent of the accidents involve bicyclesand motorbikes and account for a roughly a third of all injuries and 12 percent of traffic accident-related deaths. Infornation on the causes of accidents is sketchy: 8.5 percent indicate excess speed; 5.6 percent recklessness; 3.8 percent alcohol; and 65 percent indicate unknown causes. The number of reported accidents in N'Djamena increased by 84 percent between 1991 and 1998. These limited statistics are sufficient to demonstrate the dramatic growth in traffic accidents and the seriousnessof the trend. In response,the Governmenthas accordedpriority in its nationaltransport strategy to establisha longer-term National Road SafetyStrategy and Action Plan. In addition,the Governmentand the Bank have agreedto include a Road Safety Componentinto PAProNaT,which would finance a series of initial activitiesin that area.

3.1.3 InstitutionalFramework

A small Road Safety Unit was established in 1989 in the Ministry of Public Works, Transport,Housing and Urban Development(MTPTHU), within the Directorate of Surface Transport (DTS-Directiondes Transportsde Surface). The DTS includesthree units: (i) drivingpermits; (ii) vehicle inspections;(iii) and road safety. The tasks of the Road Safetyunit are, among others,to collect and process the traffic accident data receivedfrom the Policeand Gendarmes. The processingof these data should in principleenable the Road Safety Unit to ascertainthe number of accidents,their causes, locations and types of victims, and based on this information,propose appropriateprevention measures in terms of improvedinfrastructure in danger zones and improved road user information. However,the DTS has been unable to fulfill this mandate due to inadequate resources, both human, financial and physical. Data collection is not systematicallycorrectly carried out, due to a lack of coordinationamong the Police and Gendarmes.

3.2 Description

The sub-ComponentRoad Safety lnfrastructurewill focus mainly on the capital N'Djamema. It will consist of: * Installationof road safety signalingalong the main urbanarteries * Physical improvementsof dangerous street intersectionsand pedestrian crossings, includingthe installationof traffic lights * Safetyimprovements at high priority intersectionsin N'Djamena

- 39 - The estimatedcost of this sub-componentis US$ 1,020,000.

The sub-componentInstitutional Strengthening is designed to enable the DTS to better carry out its mandate. In particular, it will provide support in the area of Traffic accident data collection and analysis, which is essential for any Road Safety program. To a lesser extent, it will provide very basic equipment for drivertraining and testing. Particularitems to be financedwill include: * Supplyof basic computerequipment for the DTS * Supplyof basic drivertraining and testing equipment * Procurementand installationof software for managingaccident data (such as MAAP, SHERPAor DATAAC),and training on its use * Supply of optimum equipmentfor the existingGovernment vehicle inspectioncenters * Provisionof limited resourcesfor operations

The estimatedcost of this sub-componentis US$ 580,000.

The sub-component Communications and Training will include: * Road Safetyawareness campaigns on public media (radio, televisionand the press) * Productionof posters and brochuresexplaining various facets of road safety * Establishmentof a Road Safety training program for employees of both public sector agencies (DTS, Municipality,Police and Gendarme) and driving schools * In conjunction with the Ministry of Education, creation of a road safety teaching curriculum for primary and secondaryschools.

The estimatedcost of this sub-componentis US$ 320,000.

The sub-component Studies and Legislative improvements will finance technical assistance and participativeseminars for the preparationof the National Road Safety Plan which will include (i) overall quantitative objectives; (ii) an action plan, with both short and long term activities to be implemented throughoutthe country; (iii) the institutionalsetup related to Road Safety and a reorganizationplan for the DTS; (iv) the quantificationof resources required for carrying out the plan; and (v) an organizational frameworkfor collaborationamong the various stakeholders in road safety. The sub-componentwill also support the review of the existing legislation on Road Safety, in particular Law No. 5 of 1971, so as to adapt it to the current context, paying particularattention to speed limits, the updatingof the classification of higher traffic roads, the wearing of seat belts, the issue of alcohol and driving, and the wearing of helmetsby motorcyclists. The estimatedcost of this component is US$ 120,000.

3.3 Implementation Arrangements

The Road Safety component will be implemented on the technical level by the Directorate of Surface Transport(DTS) of MTPTHU, who is responsiblefor the applicationof the ministry's road safety policies. DTS will coordinateclosely with: (i) the Police, who is responsiblefor enforcingthe traffic regulations; (i) the municipalityof N'Djamena; and (iii) private sector institutions,such as driving schools, the media, insurance companies and NGO's This integrated and inclusive approach will promote a spirit of collaboration, so as to enhance the achievement of overall objectives. In order to establish this collaborative environment, the DTS will initiate the establishment of a Technical Committee. This committeewould be chaired by DTS and would include initiallythe Directorateof Roads,the Municipality of N'Djamena, the Police, the Gendarnes and the Transporters' and Taxidriver Unions. It would eventually be enlarged to include other stakeholders, such as driving schools, insurers, consumer associations,as a function of their existenceand direct interest in the issue.

- 40 - With respect to the road safety equipment, the DTS will act as the maitre d'ouvrage dgMgug, in collaborationwith the TechnicalCommittee, for: (i) procurementof the road safety equipment;(ii) safety improvementsto dangerouszones (such as intersectionsand densely populatedareas). constructionof the pilot bicycle paths; and (iii) the road safety awarenesscampaigns.

All equipmentpurchases will be made through internationalcompetitive bidding. The pilot bicycle paths will be implementedthrough the DR, who will act as the maitre d'oeuvre. The selectionof the consultants for the studiesand communicationactivities will be made in accordancewith Bank procedures.

3.4 Budget

The budget of the Road Safetycomponent is summarizedas follows (incl. taxes and contingencies):

3,1 Road Safety Infrastructure Civil Works 0.97 0.70 Supervision 0.05 0.04

3.2 Institutional Strengthening Equipment 0.38 0.27 Operations 0.20 0.15

3.3 Communication and Training Communication 0.14 0.10 Training 0.18 0.15

3.4 Legislation and Studies 0.12 0.09

Total 2.04 1.50

ProjectComponent 4 - US$1.24million

Rural Transport Strategy Development

4.1 Objective

The objectiveof this componentis to provide support to the developmentof a countryprogram for Rural Travel and Transportin Chad. The country program should be completed within two years after project effectiveness. It will seek to contributeto improvingrural livelihoodin Chad, by facilitatingaccess of the rural population,which is mostly poor, to markets and to economicand social goods and services(inputs to rural production, markets, health clinics, government administrative services, schools, food processing facilities,etc.).

This componentwill be closely linkedto the Bank-supportedRTTP - Rural Travel and TransportProgram, which is part of the SSATP - Sub-SaharanAfrica Transport Policy Program. On the Bank side, SSATP

- 41 - staff will provide technical support for the component,in particularthrough assistingChad in developinga National Strategywhich will: * identifya realistic approach as to the size and quality of the network of rural roads, tracks, paths and footbridgeswhich can be sustained in the country; * identify the role of Government (national, regional and local), village communities, producers' associations,etc. in the managementand financingof rural roads, tracks, paths and footbridges; * define ways to improve the planning, financing and maintenance of rural roads, tracks, paths and footbridges; * seek to increase the availability of motorized and non-motorized rural transport services for the movementof people and goods; and * promote the use of least-cost methods, local resources and small contractors for rural transport infrastructureworks.

Rural areas in Chad are characterized by very low population densities and severe isolation (1.284.000 km2 for roughly7 million inhabitants). The predominantmeans of transport for the 80 percent of Chad's populationwho live in rural communities are walking and head-loading. Past efforts to improve rural roads and rural mobility, although well intended, have to a large extent been piece-meal and failed to comprehensivelyestablish a coherentapproach to improverural transport.

The programwill take a policy and strategy approach and will facilitatethe dialogue between the various actors in Chadto improve and decentralizeplanning, provision and utilizationof resourcesand to enhance access and the quality and quantity of transportservices to people in rural areas. Key stakeholdersinclude the policymakers, the rural communities, NGO's farmers' organizations, transport and road user associations,the private sector and donors.

More specifically,the RTTP program will support the development of a national policy and strategy frameworkwithin which rural transport problems can be addressed in a consistentfashion. A dialogue between the key stakeholderswill be encouragedto reach consensus on how best to create the enabling environmentand utilize local and external resourcesfor improvingrural accessibility. Studies,workshops, and mass media will be employed to sensitize the key stakeholders, to enhance the capacity of local authorities and motivate rural communities to become actively involved in the improvement of their transport situation. The RTTP will also lend supportto on-going and planned in-country initiativesin the rural transportsub-sector.

4.2 Description

The sub-component Studies will finance several studies outlined below, for which detailed terms of reference will be prepared. Other studiesmay be added after a National Workshopon Rural Transportwill have been held. The studies will focus on the country-specificproblems and will aim to stimulate discussionand to generaterecommendations for overall strategy. The individualstudies envisagedare: Planning and Local Management of Rural Roads: The study will assess the experience so far and to determine best practice on how to assist local authorities in preparing maintenance programs and bid document,selecting contractors and supervisingroad works. Local Financing of Rural Roads: The study will assess the capacity of local governmentand communities in financingthe maintenanceof roads. Private/CommunityRoads: Many countries have succeededin successfullymotivating groups of private individuals,property owners (farmers),and neighborhoodsto assume ownership of their roads. Ownership has been providedthrough legal instruments.This study will provide guidance on how this would best be done in Chad.

- 42 - Promotion of IMT in Chad: There are numerous on-goingand past efforts in Chad at promoting IMT usage. What is lackingis a coherent assessmentof these effortsto establish best practice. The study will assess these efforts and will provide guidance as to how the Government can provide the enabling environmentfor the implementationof its policy of encouragingIMT usage for village transportation. The national workshop will provide a first opportunity to bring together the various actors supporting this effort. Rural TransportServices: Rural transport is not well organizedand operates largely outside the existing legal framework. The study will assess what type of incentives(positive and negative) are required, in additionto better infrastructure,to improveprovision of rural transportservices. Small Scale and Labor-Based Contractors: This study will be undertaken to analyze and support Procurementand Contract Management. It will address the specific issues relating to small scale and labor-basedcontractors.

The estimatedcost of this sub-componentis US$ 160,000.

The sub-component Workshops aims at assuring a broad-based participatory approach during the definition of the country program for Rural Travel and Transport in Chad. The first activity will be to launch the sub-componentduring a National Workshopon Rural Travel and Transport. The workshopwill serve to inform the stakeholdersof the programobjectives and the proposedactivities, and to set out a Plan of Action. The preparation of sharply focused position papers on key aspects of rural transport will precedethe workshop. These aspects includean assessmentof the experiencein Chad on managementof rural roads, communitytransport infrastructure,introduction and application of labor-basedmethods, rural transport planning,promotion of intermediatemeans of transport(IMT), and passenger transportservices in rural areas. In additionto the first National workshop,smaller workshops will be held at provincialand district levels on key aspects of RTT. For example,a workshopwill be held for key local councils staff and other stakeholdersat the local level. Workshopswill be held with initiativesinvolved in the promotion of intermediate means of transport. Initiatives to promote community ownership and cost-sharing of transport infrastructure will be closely monitored and experience shared in workshops aiming to disseminateand scale up emerging lessons.The estimatedcost of this sub-componentis US$ 230,000 .

The sub-componentStudv Tours will facilitatethe developmentand implementationof improvedpolicies and strategies. The RTTP secretariat (see below) may arrange study tours to countries which have successfullyand through innovative approaches addressed specific aspects of the rural transport sector. Alternatively,the RTTP secretariatcould invite resource persons to visit Chad to share their experience. The estimatedcost of this sub-componentis US$ 110,000.

The sub-componentPublicitv: Even good ideas have to be marketed. The RTTP will disseminate information on rural travel and transport related topics, engage local theater groups (animation)to raise awarenessof rural communities,produce stickers, and publisharticles in the local press.

The sub-componentRTTP Chad Secretariat and Support will support the establishmentof that secretariat within MTPTH7 U. It will be managed by an appointed RTTP national coordinator (see implementation arrangements below). The RTTP secretariat will also be in charge of preparing an overall Program Documentwhich summarizesresults and proposesconcrete action for the Government. This documentwill present the proposed institutional changes as well as program development efforts. These, in turn, will provide the basis for the preparation and implementationof the country rural transport program and projects for which donor-fundingwill need to be identified. The government will then implementin accordancewith the new strategy such a programwhich will includethose donor-financedprojects.

-43 - 4.3 ImplementationArrangements

As outlined above, a RTTP secretariat will be established within MTPTHU. This secretariat will be responsiblefor the technical executionof the RTTP component. The RTTP secretariatwill be managed by an appointed RTTP national coordinator,who will be the contact person for all RTTP activities in Chad. He/she will be seconded by a program assistant who will be responsiblefor the day-to-day work of the RTTP secretariat. Since the key RTTP activities will have a considerableinterface with stakeholders in the private sector, e.g. on the issue of private/communityroads, IMT and transport services, the program assistant would preferably be a, consultant from the private sector with previous experience in rual developmentand/or non-govermmental work.

4.4 Budget

The budget for this componentis summarizedas follows(incl. taxes and contingencies):

""FE~~;~ 4. Rural Transport Studies 0.16 National Workshop 0.05 0.04 Other Workshops 0.18 0.15 Study Tours 0.11 0.08 IEC 0.03 0.02 Consultant 0.06 0.05 ManagementPTMR 0.04 0.03 Transport 0.06 0.04 Office Equipment 0.03 0.02 Round Table 0.03 0.03 Pilot Program 0.49 0.40

Total 1.24 1.00

ProjectComponent 5 - US$6.27million

InstitutionalSupport and Capacity-Building

5.1 Objective

The objectiveof this componentis to strengthenthe capacityof the MTPTHUand other stakeholdersin the transportsector, both (i) to implementthe National Transport Program and (ii) in a more general sense, to carry out their assignedtasks and functions. Capacity-buildingactivities will be in the form of training and technicalassistance, consulting services and procurementof essentialgoods.

5.2 Description

The component includes several sub-components,which are (i) Training, (ii) Consultant Services, (iii) Infrastructureand equipment,and (iv) operationalsupport.

-44 - The sub-componentTraining will aim at improving the capacity of Chadian individuals and institution active in the transportsector. The detailed contents of the sub-componentwill be designedbased on the results of a study on the human resources in the transport sector; this study is presently underway under PPF financing. The study will assess the training needs of the MTPTHU, the private sector (such as consulting firms, contractors, etc.), and NGO's (such as transporters unions, etc.), as a function of the various roles and responsibilitiesof all the actors in the transport sector. In any case, training will be providedfor the environmentalassessment and managementof transport infrastructureinvestments. Most training will take place in Chad. An amount of US$ 1.5 million off taxes has been earmarkedfor the Training sub-component.

The sub-componentConsultant Services will finance all those consultant serviceswhich are not directly related to the physical works financedunder the project and their supervision(the latter are included in the Road Investmentand Maintenancecomponents). In particular,the followingservices have been identified:

* technical and financialaudits of the project, and audit-relatedstudies, at an amount estimated at US$ 970,000; * technicalassistance to the new Road MaintenanceFund, at an estimatedcost of US$ 540,000;this will be to assist the FER to establishand follow adequate operatingprocedures, and to provide on-the-job trainingfor canryingout its funds managementand technical auditingresponsibilities; * Transportsector pre-investmentand policy studies; * Otherconsultancy services, to be defined. The cost of this sub-componenthas been estimatedat US$ 2.92 million.

The sub-componentInfrastructure and Eguipment is estimated to cost US$ 0.48 million during the five-year project period and will finance improvements to office infrastructure(US$ 70,000), office equipmentmodernization and renewal (120,000),and some neededvehicles (US$ 290,000).

The sub-componentOv Suo will finance supplementaryoperating costs of the MTPTHU, mainly for the CISCP and other units involvedin project execution, at an amountof US$ 1,057,000.

5.3 ImplementationArrangements

All contractingand procurementwill be coordinatedthrough the ProjectImplementation Unit at the Cellule de Suivi et Coordinationdes Projets (CICSP) in the MTPTHU.

5.4 Budget

The budget for this componentis summarizedas follows:

- 45 - 5. InstitutionalSupport 5.1. ConsultantServices

TechnicalAudit 0.54 0.45 Financial Audit 0.43 0.35 Supportto FER 0.54 0.45 ProcurementExpert 0.07 0.05 Appui au Pilotage 0.24 0.20 Implementationof LACI 0.37 0.30 Support to DR 0.43 0.35 Other ConsultantServices 0.30 0.25

5.2. Training Staff Training and Management 1.82 1.50

5.3. Irnfractructure, Equipment and Operations Vehicles 0.29 0.21 Office Rehabilitation 0.07 0.05 Computersand other equipment 0.12 0.08

5.4. SupplementaryOperations 1.06 0.76

Total 6.27 5.00

ProjectComponent 6 - US$0.50million

HIV/AIDSand Transport(US$ 500.000 excl. taxes)

6.1 Objectives

The objectiveof this component is to contributeto reducing the risk of increased HIV/AIDS infections along major and internationalroads in Chad. There is growing internationalevidence and recognitionthat the spreading of the HIV/AIDS virus is facilitated along the main transport corridors, and in particular along internationallong-distance routes. As a result, the fight againstHIV/AIDS is not only a health sector issue, but must be coordinatedwith, and supportedby, the transportsector.

6.2 Description

The Government'smain instrument in the fight against HIV/AIDS has been, and continues to be, the Programme National de Lutte contre le SIDA - PNLS lead by the Ministry of Health and supported by various donors includingthe Bank. The Ministry of EconomicPromotion and Developmentis in charge of AIDS preventionactivities within the PNLS. A specificsub-program has been defined in coordinationwith the MTPTHU,titled Programme de Lutte contre le SIDA sur les axes de communicationdu Tchad. The activities include the promotion of AIDS awareness and education campaigns among a wide range of stakeholders along targeted roads, all of the above falling into the category of AIDS prevention. The

-46 - componentwill finance technical advisory services, media campaigns, workshops,etc. The cost of this sub-programis roughly US$ 2.0 million over a project period of five years. The PAProNaTwill finance activitiesestimated to cost $500,000 .

6.3 ImplementationArrangements

Since the component focuses on AIDS prevention,it will be implementedby the Ministry of Economic Promotion and Development through the Programme de Lutte contre le SIDA sur les axes de communicationdu Tchad, under the leadershipPNLS. The CICSP will sign an agreementwith the PNLS and the Ministry of Economic Promotion and Development, which will define the modalities for programming,implementation, finance and reporting.

6.4 Budget

The budget for this componentis summarizedas follows (net of taxes):

| Item Amount(M S US) Coronent 6: HIVIAIDS and Transort 0.5

-47 - Annex 3: EstimatedProject Costs CHAD:National Transport ProgramSupport Project

1 Road Investment 24.02 29.85 53.87 55.41 66.08 2 Road Maintenance 13.69 3.79 17.48 21.66 21.44 3 Road Safety 1.11 0.77 1.89 40.96 2.31 4 Rural Transport Strategy 0.35 0.84 1.19 70.76 1.46 5 Institutional Support 2.18 3.84 6.02 63.83 7.38 6 AIDS/HIV and Transport 0.20 0.38 0.58 65.82 0.72 Refunding of PPF 0.00 0.50 0.50 100.00 0.61 Total Baseline Cost 31.96 28.83 60.80 47.43 100.00 Physical Contingencies 3.12 2.79 5.91 47.21 7.25 Price Contingencies 1.90 1.80 3.69 48.62 4.53 Total Project Cost 46.57 44.56 91.13 48.90 111.78

Cost Cte~nr LocI kF or-eig TOM~

Goods 1.05 1.42 2.47 Works 41.44 34.55 75.99 Services 4.01 7.96 11.98 Training 0.06 0.12 0.18 Refunding of PPF 0.00 0.50 0.50 Other 0.00 0.00 0.00 Total Proiect Costs 46.57 44.56

-48 - Annex 4: Cost Benefit AnalysisSummary CHAD: NationalTransport ProgramSupport Project

Summary of Benefits and Costs:

As has been explained in more detail in the main text of this PAD, PAProNaT is a poverty-targeted interventionand has been defined in the context of a National Transport Sector Strategy,which in turn is inserted in a National DevelopmentStrategy. Both the Transport Sector Strategy and the resulting sector investmentand expenditureprogram have been defined on the basis of extensiveparticipatory consultations with numeroussocial groups, includingthe rural poor and the donor community. It has become clear that all of these groups share the firm belief that rural isolation and lack of access to markets and services (social and administrative) is the single most important obstacle against poverty reduction, and that improvementsto transport infrastructure,in particular main roads, are absolutely necessary to overcome those obstacles. It is thus clear that traditional way of evaluatingtransport sector investments, including their traditional economic evaluation, is not the main decision criteria in the Chadian case. Instead, the Governmentand the Bank team have placed emphasison reaching specificgoals which have been identified in the participatoryconsultations, such as providing all-season access to markets and services, and have then identifiedthe least-costtechnical solutions which make it likelyto reach those goals.

Nevertheless,a traditional economic evaluation has been carried out. This annex presents the economic evaluationof the World Bank's contributionto the National Transport SectorProgram, in particularfor the componentsinvolving physical investments in roads. There are essentiallythree elementsof PAProNaTfor which a full economic evaluation was carried out: (i) road paving, (ii) strengtheningof existing paved roads, and (iii) pilot program for performance-basedmaintetnance of unpaved roads. These elements represent more than 90 percent of the total project costs financed by the Bank. An economic evaluation was not carried out for the other components, which are Road Safety, Institutionalstrengthening and Capacity-Building,Rural Transport StrategyDevelopment and AIDS/HIV.

The economicevaluation for the Road Paving sub-componentcovers the road betweenNgoura and Bokoro (104 km), which is part of the main east-westtransport corridorof Chad, betweenN'Djamena and Abeche and the Sudanese border. This road was evaluated as a whole, since it presents very homogenous characteristics throughout its entire length; in terms of traffic volume, construction cost and others. Individualsubsections of that road are most likely to have the same rate of return as the road as a whole. The cost to upgrade and pave the entire road of 104 km is estimatedat US$ 21.0 million excludingtaxes.

The componentfor rehabilitationand strengtheningof existing paved roads has an estimated cost of US$ 15.3million excludingtaxes and has been describedearlier.

The pilot program for performance-basedmaintenance of unpayed roads has an estimated cost of US$ 12 million excluding taxes and consists of maintaining a sub-network of unpaved roads (441 km) under a single contract, in which the contractor will be required to provide a defined level of service during the four-yearcontract period.

The followingtable shows the project componentsand the summarizedresults of the economicevaluation.

-49 - Road Section Length FinancialProject Cost EconomicEvaluation From |To km Cost (M Cost (M Cost (M Cost NPV (M IRR (%) l______~CFA;) CFAF/klm $) ($000/km) $) Pavinu Program 104 17680 32.1 -2.0 11% Ngoura |Bokoro 104 17680 170 32.1 309 -2.0 11% Rehabilitation 287 7150 13.0 8.4 20% Program Guelengde N'Djamen 144 2542 18 4.6 32 4.8 24% ng a (Walia) Djermaya N'Djamen 27 1584 59 2.9 107 0.9 17% a (Goudji) Dandi Djermaya 89 2320 26 4.2 47 1.5 17% (RNI) Walia N'Gueli 27 704 26 1.3 47 1.2 25% Pilot Maintenance 441 1727 3.1 6.9 22% Proeram _ Bokoro Bitkine 143 715 5 1.3 9 6.8 38% Bitkine Mongo 59 295 5 0.5 9 0.8 21% Mongo Mangalme 129 387 3 0.7 5 -4.4 10% Mangalme Oum 110 330 3 0.6 5 -0.3 10% Hadjer 485_ _ Overall Project 832 26557 48285 9.5 16% * cost per year of pilot progamm

Main Assumptions:

Methodology and base data used: The economic evaluation of the rehabilitation and strengthening of existing paved roads was carried out using the World Bank Highway Design and Maintenance Standards Model (HDM-III), while the economic evaluation of the paving and pilot maintenance program was done using the Roads Economic Decision Model (RED) developed under the Road Management Initiative of the Sub-Saharan Aftica Transport Program. The latter is customized for the economic evaluation of low-volume unpaved roads (or where the without-project scenario is characterized by unpaved roads) by estimating the benefits of ensuring all-year good passability and providing the option of defining the level of service of unpaved roads, in terms of both roughness and vehicle speeds. Both models perform a life-cycle economic evaluation of project altematives, estirnating the present value of the net project benefits in relation to the without-project alternative. For the PAProNaT, a 15 year evaluation period and a 12 percent discount rate were adopted; the net project benefits are the reduction of transport costs in terms of road agency costs, vehicle operating costs and time costs. The HDM-III and RED models estimate the same road user costs as a function of the road condition and vehicle fleet characteristics. The following table presents the basic vehicle fleet data used in the evaluation, and the corresponding unit economic (net of taxes) road user costs for a series of roughness levels.

- 50 - Medium Heavv Artic. Car Pickup Bus Truck Truck Truck Economic Unit Costs New Vehicle Cost ($/vehicle) 15341 17045 61364 115909 115909 163636 Fuel Cost ($/liter) 0.51 0.51 0.51 0.51 0.51 0.51 Lubricant Cost ($/liter) 2.18 2.18 2.18 2.18 2.18 2.18 New Tire Cost ($/tire) 71 71 636 636 636 636 MaintenancelaborCost($/hour) 0.34 0.43 2.44 2.48 2.12 3.72 Crew Cost ($/hour) 0.09 0.44 0.69 1.15 1.10 0.94 Interest Rate (%) 1 12.0 12.0 12.0 12.0 12.0 12.0 Vehicle Characteristics Kilometers driven per year (km) 10000 16000 14500 20000 20000 27800 Number of passengers (#) 3 1 20 0 0 0 Gross vehicle weight tons) 1.2 2.0 6.0 12.0 20.0 30.0 Economic Road User Costs Sensitivitvto Rouehuess (S/veh-km) Roughness 2 IRI 0.29 0.26 0.78 1.07 1.30 1.44 Roughness 4 IRI 0.30 0.27 0.79 1.14 1.36 1.53 Roughness 6 IRI 0.31 0.29 0.82 1.26 1.47 1.72 Roughness 8 IRI 0.34 0.32 0.86 1.41 1.60 1.95 Roughness 10 IRI 0.38 0.36 0.92 1.59 1.76 2.22 Roughness 12 IRI 0.42 0.41 1.00 1.78 1.93 2.50 Roughness 14 IRI 046 0.47 1.08 1.98 2.11 2.79 Roughness 16 IRI 0.51 0.52 1.17 2.19 2.31 3.08 Roughness IS IRI 0-56 0.58 1.27 2.41 2.51 3.37 Roughness 20 IRI 0.60 0.63 1.38 2.63 2.71 3.67 TypicalRoad User Costs Composition(%) Fuel 13 30 1 1 11 14 15 Lubricants 2 2 1 1 1 1 Tires 2 2 10 7 9 9 Spare Parts I1 16 3 19 17 22 MaintenanceLabor 0 0 2 2 2 6 Crew 0 2 1 1 1 1 Depreciation 45 33 43 40 38 31 Interest 19 14 18 19 18 15 Passenger Time 8 2 10 0 0 0

Current traffic and road condition characteristicsof each road were collected from the recent network inventory which had been updated in the context of the definition of the National Transport Sector Program. The inventory identifies61 homogenousroad sections for the National Road Network (priority network)of around 6,200 km. For each homogenoussection, data was collected on location,length, road class, traffic,traffic composition,and road condition. Trafficcounts were made during the dry season and the calculationof the Average Annual Daily Traffic (AADT) took into considerationthat duringthe rainy season almost 40 % of the vehicles can not travel at all. The road condition was defined in term of passabilitytype (permanent or seasonal),duration of interruptionsof traffic, and estimates of reasonable speeds of differentvehicle classes on the dry and rainy seasons. The speed estimateswere then used, along with the judgment of local engineers, to estimate the road roughness of each section. The tables below presentsthe main data of the current conditionof the main prioritynetwork.

- 51 - _Length Len h Passabilitv % Surface (km) ( Surface Seasonal Permanent Paved 508 8% Paved 0O/0 100% Gravel 2182 35% Gravel 86% 14% Earth 3510 57% Earth 970/ 3% Total 6200 100

Dry Season Passenger Car Speeds kmA/hr) Surface 10 30 60 70 90 Paved 00/0 0% 0/ 0 0//0 1O00/0 Gravel 13% 28% 40% 12% 7% Earth 49% 37% 11% 3% 0%

|______Dry Season Roughness(IRI) Surface 6 9 14 16 18 20 Paved 1000/0 0% 0%/0 00/0 00/0 00/0 Gravel 00/0 18% 400/o 12% 290/o 0% Earth 1% 3% 6% 8% 41% 41%

___ __ |_ SAnnual Average DailyTraffic Surface <25 25-50 50-100 100-200 200-300 >300 Paved 0%/0 0% 00/0 59% 00/% 41% Gravel 23% 29% 43% 5% 00/° 00/c Earth 51% 22% 17% 8% 1% 0%

The National Transport Program also predicted, for each section, the expected traffic in 2008 based on past economictrends with a resulting average networktraffic growth rate of 5 percent per year. The main characteristicsof each road section included in PAProNaT are given on the tables below.

- 52 - Current Condition After Project Condition Road Section Dry/Rainy Drv/Rainy Car Rough Passa_ Speeds (km/hr) Roughness Passa_ Speeds Ness From To bility Cars Trucks IRIL) Bility (kmr/h (IRI) Pavine Program Ngoura Bokoro seasonal 30/0 15/10 18/22 all year 90 4 RehabilitationProeram Guelengdeng N'Djamdna(Walia) all year 90/90 70/70 6/6 all year 90 5 Djermaya N'Djamdna (Goudji) all year 90/90 70/70 6/6 all year 90 3 Dandi Djermaya(RN1) all year 90/90 70/70 6/6 all year 90 4 Walia N'Gueli all year 90/90 70/70 6/6 all year 90 4 Pilot MaintenanceProgram Bokoro Bitkine seasonal 30/10 15/10 16/20 All year 60 10 Bitkine Mongo seasonal 30/10 15/10 16/20 All year 60 10 Mongo Mangalme seasonal 40/20 20/15 14/18 All year 60 10 Mangalme Oum Hadier seasonal 40/20 20/15 14/18 All year 60 10

Road Section Normal Normal Growth Trucks Traffic Traffic Rate & Buses From To 1996 2008 %) %) PavingProgram Ngoura Bokoro 85 153 5% 39% RehabilitationProgram Gudlengdeng N'Djamena(Walia) 307 624 6% 37% Djermaya N'Djamena(Goudji) 474 974 6%/o 16% Dandi Djermaya(RNI) 196 438 7% 23% Walia N'Gueli 304 609 6% 16% Pilot Maintenance Program * Bokoro Bitkine 61 118 6% 56% Bitkine Mongo 53 86 4% 43% Mongo Mangalme 37 63 5% 52% Mangalme Oum Hadjer 37 63 5% 52%

Economicevaluation of Paving sub-component

The Ngoura - Bokoro road to be paved with PAProNaT financingis currently a silty sand layer earth road regularly interruptedduring up to five months of the rainy season, during which light 4x2 vehicles can hardly travel at all, and light 4x4 vehiclesand trucks only if it has not rained in the precedingweek. The objective is to guarantee all-year-roundusability of this road, and engineeringstudies have confirmedthat paving is the only realistic alternativefor reaching that goal. The estimatedtraffic for the year 2000, based on 1999 traffic counts, is 104 AADT with 39 percent of trucks and buses, and a forecast traffic growth rate of 5 percentper year. After paving, generatedtraffic is anticipateddue to the assurance of permanent passabilityand the reduction in total transport costs. The generatedtraffic was calculated assuming a ' price elasticity' of one, that is a reductionin transport costs of x percent as a result of the paving, would result in an increaseof the same percentage in the traffic volume. This represents an estimatedgenerated traffic by the year 2008 of 89 AADT. The benefits accruing to generated traffic are approximatedby calculatingone-half of the reductionof transportcosts for each unit of generatedtraffic.

Estimated currentvehicle speeds on the dry season are 30, 50 and 15 km/hour for light vehicles, 4 wheel drive vehiclesand heavy vehiclesrespectively. During the rainy season, light vehicles most of the time cannot transit and 4 wheel drive vehicles and heavy vehicles, if they can travel, they do so at 20 and 10 km/hour respectively.To model this critical road condition in RED, the period of the rainy season was

- 53 - defined as three months and the road roughnessduring the dry and rainy seasons was defined as 18 and 22 IRI respectively. After paving, it is assumed that the average road roughnesswill be 4 IRI and the road will have all-year passabilitywith vehicle speedsnot being constrainedby the road condition. To maintain this level of service, future maintenanceexpenditures were estimatedto be US$ 4,000 per km and year, comprising routine maintenanceand also periodic maintenanceevery 10 years. The constructioncosts were estimatedto be US$ 309,000per km, yieldinga total cost of US$ 32.1 millionfor the 104 km.

The economic evaluation indicatesthat the net present value (NPV) of the investment,at a 12 percent discount rate, is US$ -2.0 million with an internal rate of return (IRR) of 11 percent. This estimate is consideredconservative because the RED model considers the additionalroad user costs during the rainy season for the vehicles that transit during that season, but it does not consider the costs, and social consequences,associated with the total impassabilityof light vehicles and frequentblockage for light 4x4 vehiclesand trucks.

It should be noted that a previous economicanalysis for this same road was canriedout by a consultant,in the context of the pre feasibility study. That analysis was less conservative,using an elasticity of 1.5 for the generated traffic, and factoring in agricultural value-addedbenefits. It showed an NPV of US$ 10 million at a 12 percent discountrate, and an IRR of 16 percent (exchangerate of FCFA 600 = US$.1.00).

A study of the user impactsof the project indicatesthat all vehicle types will reducetheir vehicle operating costs by around 50 percent and time costs will be reduced by around 80 percent. However,in the overall road user cost reduction,90 percent correspondto a reduction in vehicle operating costs, while only 10 percent is related to a reduction on time costs, which is due to the low value of time in Chad. The distributionof the net project benefits by vehicle class is the following:6 percent cars, 31 percent utility vehicles and pickups, 27 percent buses, and 36 percent trucks. This result shows that most of project benefitswill go to commercialvehicles that in turn will benefit the poor (see SectionF 5, Social Analysis).

Economicevaluation for the strengtheningof existing paved roads

This sub-componentconsists of strengtheningthe followingroads with reseals or overlays:(a) N'Djamema - Gudlengdeng with 144 km, (b) N'Djamema - Djermaya with 27 km, (c) Djermaya - Dandi with 89 km, and (d) Walia - N'Gueli includingthe Djamema bypass road with 27 km. These roads total 287 km and represent basicallythe entire paved non-urban road network in Chad, except for some other roads where paving is presentlyunderway or very recentlycompleted. These roads are also those which carry the most traffic in Chad. The age of the pavementsis between six and eight years. The roads are presentlystill in reasonablygood conditionbut start showingthe first clear signs of deterioration. This means that the ideal time for interventionis now, since it is not necessary to demolish and replace the existing pavement structure; instead, the existing pavement will be strengthenedat a rather low cost by sealing or overlays. This will increasethe useful life of the pavementby some six to eight years.

The estimatedtraffic for the year 2000 (based on 1999 traffic counts) varies from 260 to 600 AADT, with around 51 percentof trucks and buses, and a forecastedtraffic growthrate around 6 percent per year. The current road roughnessestimates are around6 IRI, and the afterproject roughness estimatesvaries from 3 to 5 IRI. The projects were evaluated using the HDM Model and compared with a 'without project' minimum scenario of reconstructingthe roads at a higher cost when the roughnessreaches 8 IRI. The total program cost is US$ 15.3 million and the unit costs for works and supervisionvary from US$ 32,000 per km to US$ 107,000per km, with an averagein the order of US$ 40.000 per km.

The economicevaluation indicates that the net present value (NPV)of the programis US$ 8.4 million at 12

- 54 - percent discountrate, with an internalrate of return (IRR) of 20 percent. All road sub-sectionsyield an IRR greaterthan the typical 12 percentthreshold, with the lowest IRR being 17 percentfor the N'Djamdma - Djennaya and Djermaya - Dandi roads; these are due to the higher rehabilitation needs of the N' Djamema- Djermayaroad, and the lower traffic volume on the Djermaya- Dandi road.

Pilot programof performance-basedmaintenance of unnaved roads

The pilot maintenance program consists of maintainingfour unpaved road sections which are adjacently located in Chad's main east-west road axis: (a) Bokoro - Bitkine with 143 km, (b) Bitkine - Mongo with 59 km, (c) Mongo - Mangalmewith 129 km, and (d) Mangalme- Oum Hadjer with 110 km. The roads are a continuationto the east, in direction to the Sudanese Border, of the Ngoura - Bokoro road to be paved (see earlier in this section of the report. These roads are part of a pilot maintenanceprogram where the contractor will decide the activities needed to provide a defined level of service which will basically allow for an all-year passabilityat an averagespeed of between 40 and 60 km per hour for passenger cars. Therefore,the precise nature of the activities to be done in each road and their timing is determined in advance, but it is estimatedthat the average annual expenditureson the sub-network will be around US$ 7,000 per km-year; however, there are differencesbetween individualroad sections. The Bokoro -Bitkine and the Bitkine- Mongo roads have higher traffic (62 and 76 AADT in 2000) and are in worst condition (30 km/hour car speeds) than the other two roads (44 AADT in 2000 and 40 km/hour car speeds). Thus, these roads will require more works to achieve the required level of service. The economic evaluationwas therefore done assuming that these roads will receive around US$ 9,000 per km-year, while the Mongo - Mangalmeand Mangalme- Oum Hadjer road will receive around US$ 5,000 per km-year in maintenance expenditures.

Similar to the paving program, the generated traffic estimation under this component assumes a 'price elasticity' factor of one, which represents a estimated generated traffic in 2008 varying from 15 to 40 AADT. Also, the current conditionof each road was defined in terms of vehicle speeds and road roughness during the dry and rainy seasons. The estimated currentroughness during the dry season varies from 14 to 16 IRI and during the rainy season from 18 to 20 IRI. For the "with project" scenario, it was considered that cars will be traveling at 60 km/hourwith a correspondingroughness of 10 IRI.

The economicevaluation indicatesthat the net present value (NPV) of the pilot maintenance program is US$ 6.9 million at a 12 percent discount rate, with an internal rate of return (IRR) of 22 percent. The roads with higher benefits are Bokoro -Bitkine and Bitkine- Mongo, with 38 percent and 21 percent IRR respectively),because of their higher initial traffic and worst initial condition. The other roads in the component yielded an IRR of 10 percent, which indicates that to be economicallyjustified, these roads should receiveeven lower maintenanceexpenditures than those assumed at US$ 5,000 per km and year in the analysis;an analysis of switchingvalues indicatesthat the annualexpenditures should be in the order of US$ 4,600 per km and year to yield a 12 percent IRR.

Overall ProjectBenefits

The overall NPV of the evaluated componentsis US$ 13.3 million at a 12 percent discountrate, and the overall IRR is 16 percent.

Sensitivityanalysis / Switchingvalues of critical items:

PavingProgram

- 55 - A sensitivityanalysis shows that: (a) if road agency costs are increased by 20 percent,the IRR drops to 8 percent; (b) if benefits are reduced by 20 percent,the IRR drops to 7 percent; and (c) if agency costs are increasedby 20 percent and benefits are reduced simultaneouslyby 20 percent, the IRR drops to 4 percent. A switching values analysis shows that in order to reach a threshold IRR of 12 percent, the traffic in 2000 should be 112 AADT, which is 7 percent higher that the actual traffic. Alternatively,the investmentcost should be US$ 286,000 per km, which is also 7 percent lower that the estimatedconstruction cost; or the road roughness in the without-project case should be 19 and 23 IRI for the dry and rainy seasons respectively,which is a 5 percent increase over the estimatedvalues. These results indicate that based on just the benefits of reducing vehicle operating and time costs, the project is marginallyjustified. This is however no surprise, since similar values were indeed expected. The main justification of this road is clearly its poverty impact, by reducing rural isolation and improving access of the rural poor to markets and services(see Section F 5, Social Analysis).

Strengtheningof existing paved roads A sensitivityanalysis of this sub-componentshows that: (a) if agency costs are increasedby 20 percent, the IRR drops to 18 percent; (b) if benefits are reduced by 20 percent, the IRR also falls to 18 percent; and (c) if agencycosts are increasedby 20 percent and benefits are simultaneouslyreduced by 20 percent,the IRR is 16 percent. A switching values analysis shows that in order to have a threshold IRR of 12 percent, agency costs would have to be higher by 140 percent or benefit decrease by 60 percent. These results indicatethat the sub-componenthas a robust economicjustification.

Pilot MaintenanceProgram A sensitivityanalysis of the pilot maintenancecomponent shows that: (a) if agency costs are increased by 20 percent, the IRR drops to 15 percent; (b) if benefits are reduced by 20 percent, the IRR falls to 13 percent;and (c) if agency costs are increasedby 20 percentand benefits are reduced by 20 percent,the IRR of the component is 7 percent. A switchingvalues analysis shows that in order to have a threshold IRR of 12 percent, agency costs would have to increaseby 29 percent or benefit decrease by 23 percent. These results indicate that the program is economically justified, but is less robust than the rehabilitation program,the economicreturn being more sensitiveto the maintenancecosts and other assumptionsmade.

Overall ProjectBenefits A sensitivityanalysis for the entire project (all those componentsfor which an economic evaluation was carried out) shows that: (a) if agency costs are increased by 20 percent, the project IRR drops to 12 percent; (b) if benefits are reduced by 20 percent, the project IRR falls to 12 percent; and (c) if agency costs are increasedby 20 percent and benefits are simultaneouslyreduced by 20 percent,the project IRR is 9 percent. A switching values analysis shows that in order to have a threshold IRR of 12 percent, agency costs should increase by 23 percent or benefits decrease by 19. These overall results indicates that the project is economicallyjustified according to traditional criteria, but not with a high margin for cost increases and moderately sensitive to assumptions made for the economic benefits computations.The results are summarizedon the table below.

- 56 - Base Case IRR Sensitivity Analysis (%) NPV IRR A: Costs B: Benefits (M $) + 20% -20% A+ B Paving Program -2.0 11 % 8 % 7 % 4 % Rehabilitation 8.4 20 % 18 % 18 % 16 % Program Pilot Maintenance 6.9 22 % 15 % 13 % 7 % Program Overall Proiect 13.3 16 % 12 % 12 % 9 %

Road SafetyComponent

The road safety component includes various activities that are difficult to measure ex ante in terms of impact, i.e. the contributionof the activity to the reductionof traffic accidents,and effectivenessin terms of the benefit-costratio generated by the road safety measure applied. Major constraintsare the actual lack of reliable data about accidents, fatalities and injuries, as well as the lack of reliable information on hospitalizationdue to traffic accidents,cost of medical treatment,etc. While the project seeks to improve accident data collectionand analysis in the future, insufficient data are available today to allow for an economic evaluation of the proposed interventions. Therefore,the project has to rely on international experiencefor the selectionof effectivemeasures to reducetraffic accidents.

Countries that have tackled the road safety problem successfullyare using different approaches to assess the effectivenessof specific measures, but the most important common denominator is the appraisal of accidentrates before and after the introductionof any particularmeasure. Using the available international data, measuresproposed under the various road safety sub-componentswill be ranked based on impact and effectiveness,taking into account the country specific situation. Furthermore,road safety measures will only be taken in areas that allow for reliable monitoring and evaluation,i.e. areas where baseline accident data are available and a continuous collection and analysis of data exists or can be put in place by the project.

In any case, comparisonof internationaldata gives an approximateindication of the most effectiveroad safety improvements;it also shows an extremely high IRR for many activities,ranging from 50-80 percent.

- 57 - Annex 5: Financial Summary CHAD: NationalTransport ProgramSupport Project

Investment Costs 30.09 31.95 18.40 5.90 3.03 89.36 Recurrent Costs 0.77 0.31 0.24 0.22 0.22 1.77 Total 30.87 32.25 18.64 6.12 3.25 91.13

Project Financing IDA 22.74 23.61 13.69 4.53 2.43 67.00 Government 8.13 8.64 4.95 1.59 0.82 24.13 Total 30.87 32.25 18.64 6.12 3.25 91.13

Annex Sb: Main Assumptions in Financing Schedule Chad National Transport Program Support Project Bank's Fiscal Years

2001 2002 2003 2004 2005 1. Road Investment Paving of N'Goura-Bokoro Supervision of Paving Works Rehabilitation Works Supervision of Rehab. Works 2. Road Maintenance Road Management and Maintenance _ Supervision 3. Road Safety Works on Road Safetv Supervision - Instit. Strengthening /Communic. _ 4. Rural Transport Workshops Study Tours Equipment Round Table _ 5. Institutional Support 6. AIDS/HIV and Transport Refunding of PPF _

- 58 - Annex 6: Procurementand DisbursementArrangements CHAD: NationalTransport ProgramSupport Project

Procurement

General A Country Procurement Assessment Report (CPAR) for Chad was carried out in 1993, showing that procurementprocedures in Chad do not conflict with Bank Guidelines. No special exceptions,permits, or licenses need to be specified in the Credit since Chad's procurementpractices allow IDA proceduresto take precedence over any contrary provisions in local regulations. A new CPAR/CFAAwas carried out in May, 2000, at time of appraisalof PAProNaT. It focused on the Government's capacityto managepublic resourcesand on the impact of the recent fiscal reform on procurement. Based on the work preparedby a fiscal expert, the Government has adopted in July 2000 new Instructions for Bidders (Guide aux Soumissionnaires)which clarifiesthe fiscal issue in a satisfactoryway. Civil Works and Goods financed by IDA will be procured in accordance with Bank's Guidelines under IBRD Loans and IDA Credits (January 1995 revised in January and August 1996, September 1997, and January 1999), and Bank Standard Bidding Documents, and Standard EvaluationReport will be used for ICB. National CompetitiveBidding (NCB) advertised locally would be carried out in accordance with Chad's procurement laws and regulations, acceptable to IDA, provided that they assure economy, efficiency, transparency, and broad consistency with key objectives of the Bank Guidelines. For NCB procedures,the Governmentwill give assuranceduring negotiationsthat: (i) methodsused in the evaluation of bids and the award of contracts are made known to all bidders and not be applied arbitrarily; (ii) any bidder is given adequate response time (four weeks) for preparationand submission of bids; (iii) bid evaluation and bidder qualificationare clearly specifiedin bidding documents;(iv) no preferencemargin is granted to domestic manufacturers;(v) eligible firms are not precluded from participation;(vi) award will be made to the lowest evaluated bidder in accordancewith pre-determinedand transparentmethods; (vii) bid evaluationreports will clearly state the reasons to reject any non-responsivebid; (viii) contractorswill be allowed to select an insurancecompany of their choice; and (ix) prior to issuing the first call for bids, draft standardbidding documentsprepared as annexes to the Procedures Manual are submittedto IDA and found acceptable. ConsultantServices contracts financed by IDA will be procured in accordancewith the Bank's Guidelines for the Selection of Consultants by World Bank Borrowers(January 1997 revised in September1997, and January 1999).The standardRequest for Proposal,as developedby the Bank, will be used for appointment of consultants. Simplified contracts will be used for short-term assigmnents,i.e. those not exceeding six months, carried out by firms or individual consultants. The Govermmenthas been briefed during the pre-appraisalmission about the features of the new Consultants Guidelines, in particularwith regards to advertisement,bid opening and various steps of IDA reviews. A General Procurement Notice (GPN) has already been prepared and issued in the United Nations DevelopmentBusiness on February 29, 2000, to advertise for major consulting assignments to obtain expressionof interest, and any ICB for works and goods. It will be updated annually for all outstanding procurement. A GPN will also be published in the national press or official gazette for contracts under NCB and to obtain expression of interest from national consultants. The program elements by disbursementcategory, their estimatedcosts, and procurementmethods are summarizedin Table A below. Consultantselection methods and thresholdsfor procurementmethods and prior review are summarizedin Tables Al and B below.

- 59 - Civil Works and Goods. Civil Works contracts financed by IDA are estimated at US$76 million including taxes, duties and contingencies(almost exclusivelyunder ICB procedures). They will cover: (i) the paving of roads and the rehabilitationof existing paved-roads(US$56.84 million); (ii) a performance-basedroad managementand maintenance contract for unpaved roads (US$18.17 million); and road safety infrastructure (US$0.97 million). There will be a large volume of contracts (98 percent) exceeding US$500,000to be procured under ICB. Contracts for safety infrastructure, costing less than US$200,000 per contract, up to an aggregate amount of US$0.97 million (or 1.7 percent of total amount) would be procuredthrough NCB in accordance with national procedures acceptableto IDA. Civil works contracts will be managed by the Road Directorateusing open competition. Prequalificationwill apply only to the performance-basedroad managementand maintenance contract for unpaved roads. Other civil works contracts will be subject to post-qualificationcriteria shown in the bidding documents. This method has been used in the past few years with success. All responsivebids will be evaluatedand only the qualificationof the lowest evaluated bidder will be reviewedbefore decidingon the contractaward. The performance-basedroad managementand maintenancecontract for unpavedroads is introduced on a trial basis to test and adapt this new approach on a selected section of the national road network totaling 441 Km. The contract containsthe followingbasic principles: v The main objectiveis to attain and maintainprescribed service levels on a well-definedroad network during a specificperiod of time (in this case 4 years). The contractoris responsiblefor assuring four basic criteria:(i) year-roundpassability for certain types of vehicles; (ii) the possibilityto travel at a certain averagespeed; (iii) a certain well-definedlevel of user comfort, and (iv) the durabilityof the road, in terms of assuring the protectionof existing civil works, structures and other assets. 3 Duringthe initial periodof the contractthe service levels will graduallybe increased,in order to arrive at their final and highest level after roughly21 months;those levels are then to be maintaineduntil the end of the contract. * Paymentsto the contractorwill be fixed equal monthly amounts during the entire durationof the contract(a price adjustmentformula will however be applied to offset normal cost increasesdue to inflation,etc.). - The contractorwill have to provide performanceguarantees which are only returned after the successfulcompletion of the contract. * Penaltieswill be appliedif service level criteriaare not met; and the contractmay be canceledentirely if deficienciesare not remedied after certain maximumperiods. The draftingof bidding documentsfor performance-basedroad managementand maintenancecontract for unpaved roads was conducted on a trial basis with the participation of technical and procurement specialists. It was developed during projectpreparation by using the standardbidding documentfor works (droit civil). It was reviewed in details during pre-appraisal and finalized before appraisal during a one-week visit of the Chadian authoritiesin Washington. A final version was approved during appraisal and the bidding process is expect to start by mid-Julyafter negotiationsand after IDA's approval of the list of prequalifiedfirms. The bidding documentsare expected to serve as a bank-widemodel for that type of contracts. A prequalificationfor the performance-basedroad managementand maintenance contract for unpaved roads has been completed in July 2000. Criteria were based on past experience in the managementof large public infrastructure.

Contracts for Goods financed by IDA (totaling US$2.47 million) relate to road safety equipment, furniture, office equipment, computers, and vehicles. ICB procedures will probably be applied to road safety equipment. The remaining contracts for goods, costing less than US$200,000per contract,up to an

- 60 - aggregate of US1.1 million -- which are not likely to be suitable for ICB because of their small size, and correspond to goods available locally at economical prices to be delivered over a period of three or four years -- would be procured through NCB. Small items, which cannot be grouped into contracts of US$20,000 equivalent per contract, up to an aggregate of US$0.2 million, might be procured through prudent national or internationalshopping, on the basis of quotationsobtained from at least three reputable suppliers.

ConsultantServices. Consultingservices financed by IDA would be for: (i) studies, technical design, civil work supervision, preparationof biddingdocuments, accounting systems, financialmanagement support, technical audits, and financial audits; and (ii) consultancieson technical matters and training. Consultants financed by IDA, totaling US$12.2 million, would be hired in accordance with the Bank's Guidelines for the Selection and Employmentof Consultants(January 1997 revised in September1997, and January 1999).Selection would be based on competition among qualified short-listed firms through Quality-and Cost-Based Selection (QCBS) by evaluating the quality of the proposals before combining quality and cost evaluation, by weightingand adding the quality and cost scores. The implementationunit would ensure widely publicized procurement notice to get candidacy from consultants (firms and individuals). Based on agreed upon criteria, the coordinationunit will maintain and update a list of consultants which will be used to establish short-lists. Other methods would also apply. For financial audits, up to an aggregate amount of US$0.2 million,the Least-CostSelection (LCS) would be the most appropriatemethod -- the firm with the lowest price being selected,provided its technical proposal receivedthe minimumqualifying mark. Consultants services for institutional support to be provided by firms, estimated to cost less than US$100,000 per contract and up to an aggregate amount of US$0.63 million, would be based on Consultants'Qualifications (CQ), based on the consultants' experience and competencerelevant to the assignment. Services for lectures, advisory services and small studies would be selected through comparison of qualificationsamong IndividualConsultants (IC) expressinginterest in the assignment,or who have been approacheddirectly. This would representup to US$3.25 million for individuals,during the entire length of the project.

Short-listsof consultantsfor contracts related to land surveys, estimated under US$30,000 each, may be comprised entirely of national consultants, if a sufficient number of qualified firms (at least three) are locally available at competitive costs. However, if foreign firms have expressed interest for those contracts,they will not be excluded from consideration.

IDA Reviews. The review process would cover about 85 percent of the contract amounts for works, goods, and consultants -- see Table B below. Contractsfor works and goods, financed by IDA, above the threshold value of US$200,000equivalent will be subject to IDA's prior review procedures.Selective post-review of contracts awarded below the threshold level will apply to about one in three contracts and will be carried out by Bank staff-- using audits,and other consultants,as necessary. Bank staff will also review the selection process for the hiring of consultants proposed by the Borrower. Prior IDA review for the selection of consultants will include the review of budgets, terms of reference, short-lists, selectionprocedures, requests for proposals, evaluation reports, proposals for contract awards, and negotiated contracts. Prior IDA review will not apply to contracts for the recruitment of consulting

- 61 - firms and individualsestimated to cost less than US$100,000and US$50,000equivalent, respectively. For all consultant contracts subject to prior review (cost of each contract estimated above US$100,000), opening the financial envelopes will not take place prior to receiving the Bank's no-objection to the technicalevaluation. Documentsrelated to procurementbelow the prior review thresholdswill be maintained by the borrowers for ex-post review by auditors (technical and financial audits) and by IDA supervision missions at least two years after the closing date. For training abroad and in-country,the program -- containing names of candidates, costs estimates, content of courses, periods of training and selection of training institutions -- will be reviewed by IDA annually.

Frequencyof procurementsupervision. One supervision mission every twelve months will include a procurementspecialist to carry out procurementpost-reviews. Modificationor waiver of the scope and conditions of contracts. Before agreeing to any material extension,or any modificationor waiver of the conditions of contractsthat would increase aggregate cost by more than 15% of the original price, the Borrower should specify the reasons thereof and seek IDA's prior no-objectionfor the proposedmodification.

ProcurementStatus of OngoingProjects and ProposedArrangements. National bidding procedures for public procurement in Chad have not improved recently and practical procedures for implementing the recent fiscal reform has been clarified during appraisal. Formal "Instructionsto Bidders" have been adopted by the Government as requestedby the Bank. The May 2000 CPAR mission focused on necessary measures to increase efficiency and transparencyof procurementin Chad. An action plan will be discussedwith the Government in the contextof the entire portfolio in Chad, but it will also have a direct impact on the project. It was agreed during the appraisal mission that the Governmentwill re-organizeprocurement in Chad, so that new operationsfinanced by IDA will eventually not require waiversor exceptionalmeasures such as the use of specialtender boards.

In comparisonwith other ministriesin Chad, staff working in the transport sector have been trained since severalyears, and they have acquired experiencein contract managementunder both the recently completed PST2 project and an earlier project. Technical management of project components will be the responsibility of each Directorate (Road Directorate, Directorate for Surface Transport), but overall supervision,financial accounting, quality control of procurementand liaison with the Bank will be handled by the ProjectCoordination Unit (CISCP). The Directoratefor Roads will include a procurementspecialist and would use consultants as necessary to carry out specific tasks. An assessment of the capacity of the CISCP and Directorateswas carried out during the pre-appraisalmission. Strengtheningneeds have been indicatedin an action plan and will receive special attention (see the assessmentreport below). Basically, it can be concludedthat the CISCP and the Directoratefor Roads requireto be improvedduring the project in the area of bid evaluation, bidding document preparation, procurement filing and contract management. Apart from the need to recruit a procurementspecialist at the CISCP and the Directoratefor Roads, there seems to be no staffing gap, as the procurement plan shows only 4 contracts for consulting services, 6 contracts for works and 5 contracts for goods which would be managed over the five project years. Most contracts for works are major contracts under ICB. In addition,the project will strengthenthe capacity of the legal unit dealing with procurement at the MTPTHU -- "Cellule Juridique et des Marches" of MTPTHU - to allow the decentralizationof procurement responsibility at MTPTHU Given the large contract amounts and taking into accountthe need to ensure proper quality of works completed,it has been agreedto recruit a technicalauditor, independentfrom the financialaudit. On this basis, it has been agreed

- 62 - that one in four contracts not subjectto IDA prior review threshold would be subject to post-reviewby the Bank and more systematicallyby the technical auditors.

ProjectImplementation and ProceduresManual and agreements. A Project Implementationand ProceduresManual on administrativeprocedures and internal organization would include: (i) procedures for calling for bids, selecting contractors, consultants,and vendors, and awarding contracts; (ii) internal organization for supervision and control of works; (iii) financial management,budgeting, accounting, and disbursement procedures;and (iv) proceduresfor handing over completedworks. This manualwas initiatedduring appraisal. The formal adoptionby the Borrower of the Project Implementation and Procedures Manual, satisfactory to the Bank, will be a condition of effectivenessfor the credit.

During appraisal the Governmenthas submittedand agreed with IDA on: (a) a draft procurementplan for the first two program years; (b) a request for proposal to select a firm to establishthe financial and contract managementsystem of CISCP, and provide initial training and guidance to the CISCP and all Directorates in the area of procurementand financial management;(c) a draft Guide to Biddersto describe the use of Treasury Checks for the reimbursementof indirect taxes; (d) standard bidding documents to be used under NCB procedures for civil works and goods; and (e) a request of proposal to select a technical auditor.

Prior to negotiations, the Government will submit to IDA a request for proposal and a short-list for the selectionof technical assistanceto the "Legal and ProcurementUNIT' of MTPTHU.

During negotiations the Government will also give assurance that it will: (a) adopt the action plan for decentralizationof procurement at the level of MTPTHU; (b) use the Project Implementation and Procedures Manual; (c) use the Bank's Standard Bidding Documents for ICB, the Standard Request for Proposals for the selection of consultants, and the Standard Bid Evaluation reports; (d) apply the procurementprocedures and arrangementsoutlined above; (e) update the procurementplan at least once a year, and (f) carry out, during annual reviews, an assessmentof the effectivenessof bidding proceduresand performance, as they relate to the program's procurement experience, and propose for IDA and other donors' consideration any modification to the current procedures to the extent that would accelerate procurement,while still maintaining compliance with the Bank's Procurement Guidelines and adequate control over contract awardsand payments. The Governmentwill also give assurance at negotiations that it will take the necessary measures to ensure that procurementphases do not exceedthe followingtarget time periods:

ProcurementPhases Maximum number of weeks

Preparation of bidding documents 4 (6 for large contracts)

Preparationof bidsby bidders 4 (6-10 for ICB) Bidevaluation 2 (4 for large contracts) Signatureof contracts 2

Payments 3

-63 - Procurementmethods (Table A)

Civil Works 75.02 0.96 75.99 (54.01) (0.70) (54.71)

Goods 0.59 1.89 2.47 (0.42) (1.36) (1.78)

Consultin2 Services 12.16 12.16 (10.00) (10.00)

Refunding of PPF 0.50 0.50 (0.50) (0.50)

Total 75.02 1.56 12.16 2.39 0.00 91.13 (54.01) (1.12) (10.00) (1.86) (0.00) (67.00)

AFrms 8.4 0.47 0.20 0.00 6.90 (6.95) (0.39) (0.16) (0.00) (5.68)

B. Individuals 0.00 0.00 0.00 3.25 3.25 (0.00) (0.00) (0.00) (2.67) (2.67)

Total 8.44 0.47 0.20 3.25 12.16 (6.95) (0.39) (0.16) (2.67) (10.00)

Note: QCBS = Quality-and Cost-Based Selection QBS = Quality-based Selection SFB = Selection under a Fixed Budget LCS = Least-Cost Selection CQ = Selection Based on Consultants' Qualifications Other = Selection of individual consultants (per Section V of Consultants Guidelines), Commercial Practices, etc. N.B.F. = Not Bank-financed. Figures in parenthesis are the amounts to be financed by IDA.

- 64 - Priorreview thresholds (Table B)

Table B: Thresholdsfor ProcurementMethods and Prior Review

Contract Value ControatsSubject to Threshold Procurement PriorRview ExpenditureCtgor (US$tousands) , Method (US$miions) 1. Works >500 ICB $75.03 <500 NCB 0.97 <200 Post Review 2. Goods >200 ICB <200 NCB 0.59 <20 National & Inter. Shopping 1.89 3. Services a) Firms >100 QCBS/LCS/CQ 8.91 <100 QCBS/LCS/CQ post review b)lndividuals >50 other 3.25 <50 other post review 4. Miscellaneous 5. Miscellaneous 6. Miscellaneous

Total value of contracts subject to prior review: $ 84.00million

Overall ProcurementRisk Assessment Average

Frequencyof procurementsupervision missions proposed: One every 12 months (includesspecial procurementsupervision for post-review/audits) Post Reviews will apply to one (1) contract out of four (4) non subject to prior review Thresholdsgenerally differ by countryand project. ConsultOD 11.04"Review of Procurement Documentation'and contact the RegionalProcurement Adviser for guidance.

- 65 - Disbursement

Allocationof creditproceeds (Table C)

The proposed allocation of the proceeds of the credit is shown in Table C. The credit will disburse over a period of 5 years (from 2000 to 2005) with a closing date of July 31, 2006. Disbursements will be made in accordance with the procedures and policies outlined in the Bank's Disbursement Handbook.

Table C: Allocation of Credit Proceeds

D Expndltur Category i2a AniiantIn U$$mIIIlo Fnancig Percentage 777;; Civil Works 46.25 72% Goods 1.78 72% Consulting Services 9.57 82% Project Management 0.50 82% Refunding of PPF 0.50 100% Unallocated 8.40

Total Project Costs 67.00

Total 67.00 Note: Unallocatedamount includes contingenciesfor works,goods and consulting services.

Use of statements of expenditures(SOEs):

SOE's have been used by the CISCP for at least 8 years and no major problems have occurred. In particular, the presentation of ineligible expenses has been absent and the Bank is satisfied that the financial management and control procedures in place at CISCP are adequate to warrant the correct use of SOE's. For the PAProNaT, expenditures under contracts for works and goods valued at less than US$ 200,000; for consulting firms valued less than US$ 100.000 and for individual consulting services valued at less than US$ 50,000; and all training and all operating costs will be claimed for financing using SoE's. Documents verifying expenditures under SOE procedures shall be retained, for review by IDA Supervision Missions and independent audits, at project offices.

Special account: To expedite disbursement and to ensure that project funds are available when needed, the Government will open a special account at a local commercial bank on terms and conditions acceptable to IDA. The special account will receive, upon effectiveness of the credit and based on a withdrawal application of the PMU, an initial deposit equivalent in FCFA to US$ 2,800.000 representing the estimated level of expenditures under SoE's during a 4-month period. The funds in the special account will be used to pay for the IDA share of eligible expenditures. The account will be replenished periodically and will operate according to the procedure manual adopted for the project and accepted by the Bank.

Minimum Value for Direct Payments and Issuance of Special Commitments (SCs):

Direct payment requests and applications for issuance of special commitments must be valued at least 20 percent of the original special account advance of US$ 2,800,000 equivalent. The minimum application value for direct payments and SC's will thus be US$ 560,000 equivalent.

- 66 - GovernmentCounterpart funds / IDA financingpercentage

The relativelylarge share of Governmentfinancing of the project is explainedby the fact that accordingto the Chadian tax legislationintroduced in 1998, all contracts have to be signed including all taxes. These taxes include, as a minimum, a Value-Added Tax (TVA) of 18 percent and a stamp tax (droit d'enregistrement)of 3 percent. On works and goods,customs fees for importedgoods will also be included (directlyor indirectly)in the invoicesto be presentedby contractorsand suppliers.

Government'sshare of expendituresunder the project will be financed in part through Treasury Cheques and in part through actual cash funds.

Accordingto the Chadian legislation,Treasury Cheques may be used to pay for customs duties, sales tax (IVA) and stamp fees (droits d'enregistrement),the sum of which is estimatedto amount up to 19.6percent of total project costs. This type of counterpartfinancing will be mobilizedand made available during the executionof contracts signedwith contractors,consultants and suppliers,but in any case before payment of those taxes is demandedfrom those contractors,consultants and suppliers.

Counterpartfunds in the form of actual cash are meant (i) to cover direct taxes which are hidden in project costs, and (ii) to constitute an small actual net contributionof the Governmentto the cost of the project. Counterpartfunds in form of cash are likely to amount to 6.6 percent of the total project cost. The Bank will require that before the signature of specific contracts for works, goods or consultant's services, this part of counterpart funds for the relevant contracts are deposited into a Project Account at a local commercialbank.

FinancialManagement Risks

The CISCP has shown over the past years its abilityto exercise adequate financialmanagement capacity and performance. It must however be recognizedthat the capacity of CISCP is representedby a very small number of individuals which have remained in their positions for almost 10 years, in particular the coordinatorand the chief accountant. The FinancialManagement Risk is thereforelinked to the possibility that these individualsmay either be replacedby the Governmentor not be available for any other reason. This is not expected to happen at this time. In any case, the training of staff of the MTPTHU should includemore junior staff withinthe CISCP who could, if necessary,replace the senior staff.

-67 - Annex 7: Project ProcessingSchedule CHAD: NationalTransport ProgramSupport Project

P _*t_ Xb*P!lnr4 .ptual Time taken to prepare the project (months) 8 13 First Bank mission (identification) 07/27/99 07/27/99 Appraisalmission departure 04/23/2000 04/23/2000 Negotiations 06/15/2000 09/05/2000 Planned Date of Effectiveness 09/15/2000 12/15/2000

Prepared by: MTPTHU - CISCP

Preparation assistance: Second TransportSector Project (PST2) and PPF.

Bank staff who worked on the project included:

Name Speciality AndreasSchliessler Task Manager, Senior Transport Economist Robert Fishbein Agric. Economist,Environmental Specialist LamineBen Barka CivilEngineer Bemard Abeille PrincipalProcurement Specialist Bertrand de Chazal Senior FinancialAnalyst Joseph Bonlong FinancialAnalyst Nina Chee EnvironmentalSpecialist CharlesDonang ProjectsOfficer Moctar Thiam Rural Transport Specialist SidleSilu6 Rural Transport Specialist Jerry Lebo Poverty and Transport Colin Gannon Poverty and Transport MicheleLioy SeniorPopulation Specialist Josee BamviMiakukila LanguageProgram Assistant MiguelMayor Intern ENPC Jean-Charlesde Daruvar SeniorCounsel

- 68 - Annex 8: Documentsin the ProjectFile* CHAD: NationalTransport ProgramSupport Project

A. ProjectImplementation Plan Appui a la Definitionde la Strategiedes Transports,Financement de l'Entretien Routier, Plan de Mobilisationdes RessourcesPotentielles (Louis Berger International,February 1999).

EntretienRoutier par Niveaux de Service,Dossier d'Appel d'Offres (Biddingdocument for works for the performance-basedroad maintenancecontracts, Niv_Serv.doc).

B. BankStaff Assessments ProjectConcept Document(September 1999, PCD Draft.doc).

ProjectInformation Document (September 30th 1999,Pid.doc).

Aide-Memoires: - First PreparationMission (September 17th- October3rd 1997,Am_0997.doc) -IdentificationMission (July 27th -August 6th 1999,Am-0799i.doc). - Pre-AppraisalMission (January 10th- January20th 2000).

ProcurementCapacity Assessment (jan. 20,2000).

EnvironmentalData Sheet.

Etude de Sensibilitedes Prix des Carburantsau Tchad (sensitivityanalysis explaining the different possibleconsequences of the implementationof the CAER,Elasticite_Carb2.doc).

Petrol3.xlsand Petrol4.xls(electronic files containingthe models used in the sensitivityanalisys).

Road User ChargesApplication (report justifying the implementationof CAER in terms of maintenancefinancing necessities).

Pst3_est.xls(electronic file containingthe investmentprograms of other donors in Chad for the period 1999-2003,and identifyingthe lacks of financingfor certain roads).

C. Other Mission d'lnformation de la Delegationdu MTPTHU, Compte Rendu des Discussions(June 8th, June 13th 1999, Am_deleg.doc).

Etude sur la fiscalite dans le secteur des transports,la mobilisationet la securisationdu CAER (NetherlandsEconomic Institute, July 1998). *Includingelectronic files

-69 - Annex 9: Statement of Loans and Credits CHAD: National Transport Program Support Project

Difference betweenexpected and actual OriginalAmount in USS Millions disbursements Project ID FY Borrower Purpose IBRD IDA Cancel. Undisb. Orig Frn Reid P000501 1995 Chad AGSERVICES 0.00 24.53 0.00 6.24 2.37 1.39 P000517 1993 Chad EASICEDUCATION 0.00 19.30 0.00 3.32 3.55 0.00 P000528 1991 Chad ENGINEERING 000 1100 0.O0 3.59 380 392 P000509 1994 Chad HEALTH&SAFE MOTHER 0.00 29.40 0.00 4.43 -677 4.66 P055122 2000 Chad HEALTHSECTOR SUPPORT PROJECT 0.00 41 51 0.00 40.52 0.00 0e00 P000532 1998 Chad HOUSEHOLDENERGY 0.00 5.27 0.00 4,31 2.46 0.00 PC62840 2000 Chad MANAGEMENTOF THEPETROLEUM ECONOMY 0.00 17.50 0.00 1678 1.17 0.00 P048202 2000 Chad PETROLEUMSECTOR CAPACITY BUILDING 0.00 23.70 0.00 22.76 0.00 0.00 P035601 1996 Chad POP.&AIDSCO 0.00 20.40 0.00 5.40 4.11 0.00 P044305 2000 Chad TUOCMPIPELINE 39.50 0.00 0.00 39f50 0.00 0.00

Tolal: 3950 192.61 0.00 146.85 10.69 9.97

- 70 - CHAD STATEMENTOF IFC's Held and DisbursedPortfolio 20-Sep-2000 In Millions US Dollars

Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic

Total Portfolio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

ApprovalsPending Commitment FY Approval Company Loan Equity Quasi Partic 2000 Chad Oilfield 100000.00 0.00 0.00 300000.00 2000 SEF Dembat1ait 330.00 0.00 0.00 0.00 Total Pending Commitment: 100330.00 0.00 0.00 300000.00

-71 - Annex 10: Country at a Glance CHAD:National Transport Program Support Project Sub- POVERTY and SOCIAL Saharan Low o- Chad Africa income Development dlamond' 1999 Ponulation mid-vear imillionst 7 5 647 2 417 Life expectancy GNPnrw anita (Atbls method US$) 90-n snoI 410 ONP (Atlas method IJSI hilliots) 1 f 371 .8S

Averaae annual orowth. 199349 Pionutatinn t%) 3 0 7 I t abor force (%I 3 0 2.6 2 3 GNP Gross per primary Most recent estimate (latest vear available. 1993-991 capita en,nttmenl Povertv f% of OOou/atiOnbelow nahonal oovertvline) 54 tirhan nnoiultion (1%o total ooDulation) 7:1 84 31 I ifM axnactanOv at h,rth (veArs) 49 S0 t0 Infant mortatitv (Der 1.000 live births) 100 92 77 Child malniotritvn (# of crhildrenunder Sl 39 32 431 Access to safe water Access to imoroved water source (% ofDoOuliatoni 24 43 64 Illiteracv /% Of DOOuatfiOnaoe 15+1 52 3Q 39 Gross orimarv enrollment (% Ot schoOt-aae oooulation) SS 78 98 Chad - Low-incomegroup Male 74 85 102 Fmamla 38A 71 Fffi

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1979 1989 1998 1999 - Economic ratios GDP (USS billions) 10 1 4 1 7 1 S Grors. drtinme. investmrentlGnp R0 1RQ0 Ina Trade Exoors of ooodsand services/GDP 17 8S 3 8 16 6 17 T Grosr; donme;tic sstvinnq/rTP .9 8, 4 3 -3 2 Cr-4s naiinnr.t t4 Ps7, -A R68 -9 8 r-rrant arccount halanrMAeGIP 43 a R 12 - 4 -17 a Domestic Interest nsvmPntsql(flP 0 0Q1 07 Sa Investment Total debt/GOP 25 0 26.3 54 6 74 6 Nvings TntAt debhtserviAlenorts 8 't S 13 7 1i7a Present value of debt/GDP 37 5 39 5 P*resa1t val.Ae of debt/aeorts 1R9 8 204 f Indebtedness 1979-89 1989-99 1998 1999 1999-03 laveraae annual arowtht 0DP a 0 1 9 6 7 -0 7 3 4 Chad Low-income group GNP nar canita 3 4 -0 7 4 4 -3 2 0 6 Exoorts of ooods and services 5.5 3.7 12.2 -13.2 5 8

STRUCTURE of the ECONOMY 1979 1989 1998 1999 Growth of Investnment and GDP (%) (% of GOP) 40 Amrirltlurn 40 8 31 7 38 1 3fi n Indiustrv 10 4 1t 7 1h 3 14 7 20 Mao,,fsntu,inri 13 4 19 R 11 R Servicac 48 8 51 7 48 8 493 0 94{ 55 96 97 9s 99 Private rnnnsimotion 94 R 88 7 92 7 -20 G-neral1novernm.nt rensiamnti.n 150 89 80 GDI - GDP ImDorts of ooods and services 34 6 31.4 30 3 30 4

1979-89 1989-99 1998 1999 Growth Of exports and Imports (%) (averaoe annual arowth) Aoriculture 2.7 4 6 11 1 -6 5 3 Industrv 7 4 0 4 9 0 -41 20 Manufacturino 9.9 -7.0 10 Services 6 5 0 7 2 8 51

Private consumotion 1 3 8 2 0 0 949 957 General aovernment consumotion 20 9 -3 7 -6 3 12 2 V Gross domestic investment 32 -2 138 -20 ImDorts of ooods snd services 9 2 -t 3 1 2 4 0 Exports -Imports Gross national oroduct 5 9 1 8 7 0 -0 8

Note. 1999 data are preliminary estimates. The diamonds show four kev indicators in the country tin bold) comoared with its income-orouo averaoe If data are missino. the diamond will be incomDlete

- 72 - Chad

PRICESand GOVERNMENTFINANCE Domesticprices 1979 1989 1998 1999 Inflation (%) (% change) 60 - Consumerprices .. -4.9 4.4 -8.4 40 Implicit GDPdeflator 8.2 -1.3 5.8 -4.7 20

Government finance o I (% of GDP,includes currentgrants) 94 95 96 97 9S Current revenue .. 6.3 7.7 8.3 -20 Currentbudget balance .. -2.9 0.3 -1.1 - GDPdeflator - CPI Overallsurplusldeficit .. -16.7 -6.3 -10.8

TRADE

(USSmfilionS) 1979 1989 1998 1999 Export and import levels (USSmill.) Total exports (fob) 155 261 211 Cotton .. 74 133 76 Meat .. 42 51 54 Manufactures 3 27 29 Total imports(cif) .. 313 272 246 2 Food . 5 4 4 Fuel and energy .. 32 22 24 1 l_ Capital goods 77 174 154 o 93 94 95 96 97 90 99 ExDortoriceindex(1995=1O0) .. 117 100 105 Imoort once index 11995=1001 86 79 86 a Exports * Imports Termsof trade (1995=100 .. 136 126 122

BALANCE of PAYMENTS 1979 1989 1998 1999 Current account balanceto GDP(%) /VSS nsillonsl Exports of goodsand services 93 198 314 260 Importsofgoodsandservices 119 450 511 465 Resourcebalance -26 -253 -197 -205 4 |- Net income -9 -9 -14 -14 Net currenttransfers -9 78 53 23 9 ll 'l i Currentaccount balance -44 -184 -158 -195 -12 Financingitems (net) 41 220 138 171 Changesin net reserves 2 -37 20 25 -16 Memo: Reservesindudino aold (USSmillions) .. .. 135 150 Conversionrate (DEC.localAJSS) 212.7 319.0 590.0 614.8

EXTERNAL DEBT and RESOURCE FLOWS 1979 1989 1998 1999 (USSnmilFons) Compositionof 1999debt (USSmill.) Total debt outstandingand disbursed 251 377 917 1,141 IBRD 0 0 0 0 F: 14 G.7 IDA 36 130 502 527 E:155 Total debt service 4 12 47 45 IBRD .. .. 0 0 IDA 7 9 B~~~~~~~~~~~~~~~~~~~~~~~~~~~~~:527 Compositionof net resourceflows Officialgrants 49 127 83 Officialcreditors 94 124 D:39_ Private creditors .. .. -1 -1 Foreigndirect investment 0 19 16 Portfolio equity | c: 45 World Bank program Commitments 0 58 0 30 A - IBRO E - Bilateral Disbursements 5 34 59 53 B - IDA D- Othermultilateral F - Pnvate Principal repayments .. .. 3 5 C - IMF G - Shortermn Net flows .. .. 56 48 Interestpayments 0 1 4 4 Net transfers .. .. 52 44

DevelopmentEconomics 9/7/00 - 73 - Additional Annex No.: II Chad National Transport Plan Support Project Procurement Capacity Assessment Summary of Findings and Actions

F ~~~RiskAssessment

Item Assessed Satis- Major Weaknesses Null Poor Fair fctory Low Ave. HighActions ProposedProposed CompletionDate

(a) Legal Aspects

(i) Laws & Regulations X Procurementcode needsmajor revisions.XACPAR and a CFAA reviewneeds to be conductedfor Chad.Beforeend of FY00

(ii) NCB Procedures X No standardNational procedures and standardbidding documents for works,goods and consultants. XDevelopnational SBDs and RFP as part of capacitybuilding; ensure IDAprior review of SBD to be used by Borrowerfor NCB At negotiations

(iii) Internalcodes and manuals X No procedure manualunder the on-goingoperation.XProduce a procedure manual to ensure adequatecoverage of procurement procedures.Beforeappraisal and to be adoptedduring negotiations

(b) Proc. Cycle Mgmt.

(i) Generalhandling X Lack of understandingof new featuresof Bank proceduresXIDA SOE review and procurementpost review to be conductedbefore end of FY00to determineprocurement trainingneeds at the level of the Coordinationunit, and Directoratesinvolved in the implementationof the future project. Delivertraining before crediteffectiveness, and ensure propercoaching by a Procurement specialistat the CountryOffice. Beforeproject launch and during projectimplementation

- 74 - (ii) Procurementplanning X Planningis ensuredsince years by externalTA. It has postponedthe developmentof nationalcapacity. XTA shouldconcentrate on helpingnational staffto handle contractplanning and management,instead of providing substitutionassistance.Before crediteffectiveness

(iii) Preparationof documents X Most biddingdocuments are for ICB. In generalthey are prepared by consultantsand are satisfactory. XRecruitinga procurement specialistat the coordinationunit would generatedurable national capacity.Before negotiations

(iv) Managementof process X X

(v) Bid evaluation X Bid evaluationreports are showing a total lack of understandingof niewfeatures of Bank proceduresXUseof standard evaluationreport is necessary. Trainingwould also address this issue.Beforecredit effectiveness

(vi) Contract award X X

(vii) Preparationand signing of X There is no systematicquality conbtacts controlby competentstaff before contractsignature.XRecruit a procurementspecialist at the level of the coordinationunitBefore negotiations

(viii) Contbactmanagement X XCapacitybuilding during the first projectyear.

(c) Organization and Functions

(i) Organizationof unit and functions X X

(ii) Intemal manualsand instructions X No intemal manuals and instructions.XAProcedures Manualwill be prepared. Before negotiations

(d) Support and Control Systems

(i) Auditing X X

(ii) Legal assistance X X

(iii) Technicaland administraive X X controls

(iv) Code of ethics X X

(v) Anticorruptioninitiatives X No initiativesin this area.XCPAR and CFAAreview will addressthis issue.Beforeend of FY00

- 75 - (e) Record keeping Copiesof records are scatteredin separatefiles which makes retrievaldifficult. Filing of documentsrespond to basic requirement,but it relies on individualand filing is scatteredin variousunits and offices. It is necessaryto re-organizethe filing system. So far there is no special requirementconceming the period documentsshould be kept in files beforebe archived.Duringproject launchand continuallyduring projectimplementation

(i) Publicnotices X X

(ii) Biddingdocuments X X

(iii) Bid openinginformation X X

(iv) Bid evaluationreports X X

(v) Formalappeals and outcomes X x

(vi) Signed contractdocuments X X

(vii) Claims and disputeresolution X X records

(viii)Comprehensive disbursement data x x

(I) Staffmng

(g) GeneralProcurement Environment

(i) Promotinga cultureof X x accountability

(ii) Reputationof procurementcorps X x

(iii) Salary structure X X

(iv) Freedomfrom politicalinterference X X

(v) Existenceof experiencedand X Absenceof a procurement capablestaff specialistXSeniorprogram officer at the coordinationunit will take the lead in procurementand will be trainedfor this purposeBefore Projecteffectiveness

(vi) Clear written standardsand X X delegationof authority

(vii) Sound budget/financialsystems X X

(h) Private Sector Assessment X

(i) Generalefficiency and X X predictability

(ii) Transparency X X

- 76 - (iii) Quality of contract mgmt. I

(iv) Generalreputation X X

Prior Review ThresholdsProposed Overall Risk Assessment

Goods US$ I00,000 (equivalent) High

Works US$ 200,000 (equivalent) Average x

Consultingfinns US$ 100,000 (equivalent). IndividualsUS$30,000 (equivalent) Low

Post Review Ratio:One in Four contracts

Frequencyof procurementsupervision missions proposedOne every six Formprepared by: BernardAbeille, Principal Procurement Specialist monthsby CountryOffice procurement staff and procurementspecialist from HQ (January2000) during mid-termreview. Procurementpost reviewsshould also be conductedat least very two years.

Comments: Based on informationcontained in the assessment, it can be concludedthat the PCU requires improvementin areas of bid evaluation,bidding document preparation,procurement filing and contractmanagement Apartfrom the need to recruit a procurementspecialist at the coordinationunit and an engineerat the Directoratefor Roads, there seems to be no staffinggap, as the procurementplan shows only 4 contractsfor consultingservices, 6 contractsfor worksand 5 contractsfor goodswould be managed overthe five projectyears. Also,each componentwill be extensivelyinvolved in preparationof TORsand Technical specificationsfor goods. Most contractsfor worksare major contractsunder ICB. The NationalTender Board is part of the TechnicalCommittee providing clearance for proposedcontract awards. Given the large volume of contractamounts and potential cases of dispute,it has been agreedthat there is a needfor hiringa procurementofficer at the CoordinationUnit. The newly recruitedProcurement Specialistwill needadditional training in the new featuresof Bank procurement guidelines,and assistanceby the Procurementspecialist of the CountryOffice. Taking into accountthe needto ensure proper qualityof workscompleted, it has been agreedto recruit a technicalauditor, independentfrom the financialaudit. On this basis, it has beenagreed that one in four contractsnot subject to IDA prior review thresholdwould be subjectto post-reviewby the Bank.

- 77 - Additional AnnexNo.: 12

Republic of Chad Unity - Work - Progress

Ministry of Public Works, Transport, Housing, and UrbanDevelopment

ENVIRONMENTALIMPACT ASSESSMENTOF THE TRANSPORTSECTOR

ASSESSMENTOF THE IMPACTOF THE NATIONALTRANSPORT PROGRAM SUPPORTPROJECT (PAProNaT)

February2000

i. Abbreviations and Acronyms

ANAT NationalAgency of AeronauticalActivities in Chad ASECNA Agencyfor the Securityof Aerial Navigationin Africa and Madagascar ASST Health StatisticsAnnual: Chad BET Borgou Ennedi Tibesti ICDCS PermanentInterstate Committee for Drought Control in the Sahel CPR Road PlanningUnit TCESM TechnicalCommittee for EnvironmentalSurveillance and Monitoring EDST Demographicand Health Survey in Chad GENiS-RT Performance-basedMaintenance and ManagementPilot Program EIA Environmentalimpact assessment ENTP NationalSchool of Public Works DAC Civil Aviation Directorate DEP Research and PlanningDirectorate DR Roads Directorate DTS Surface Transport Directorate HIV Human immunodeficiencyvirus MASOCOT Subsidizedcondoms program in Chad AM AccountabilityMission MEW Ministryof the Environmentand Water MTPTHU Ministry of Public Works, Transport,Housing and Urban Development NGO Nongovernmentalorganization PAProNaT National Transport Program SupportProject (2001-2005)

- 78 - PDLCD Master Plan to Combat Desertification PNLS NationalProgram of Action against STD/HIV/AIDS PNT National Transport Program (2000-2009) PST2 Second Transport Sector Program CAR CentralAfrican Republic RPR Rehabilitationof Paved Roads SNCT National Truckers' Union STD Sexuallytransmitted diseases ii. SUMMARY

1. Purpose of the study

1.1 The study consists of an environmental impact assessment of the National Transport Program Support Project (PAProNaT)in Chad in accordance with World Bank OperationalDirective OD 4.01. The study focuses on the componentswith potentially negative impacts on the environment,namely the "Rehabilitationof paved roads" (RPR) and "Performance-basedMaintenance and ManagementProgram" (GENiS-RT) subprojects.

2. Descriptionsof the assessed subprojects

2.1 The "Rehabilitationof paved roads" (RPR) subproject is a 286 km-long network of currentlypaved roads comprisingthree subnetworks: * The northern branch: N'Djamena - Djermaya - Dandi - Karal: 116 km * The southern branch N'Djamena - Guelengdeng: 144 km * The periurbanbranch: the N'Djamena and Walia - N'Gueli bypass: 26 km

2.2 The "Performance-basedMaintenance and Management program" (GENIS-RT) subproject area covers 441 km of existing unpaved roads providing a continuous link between the towns of Bokoro (143 km) Bitkine (59 k'm) Mongo (129 km) Mangalme (110 km) Oum-Hadjer.

The provisional bidding documentsenvisage in particular: * Preparationof a "draft" longitudinalprofile for the roads to be maintained; * Maintenanceof a specific "level of service", thereby guaranteeing,except for bans on heavy vehicles using the roads in the rainy season,that the roads are always open, durable, and in a state that allows passengersto travel in comfort; and * Emergency repairsto re-establishnormal transit in the event of major unforeseen deterioration.

Neither the layout nor the longitudinalprofile of the roads will be altered, except insofar as the profile is raised by the thickness of the additional layer of asphalt applied in certain sections of the paved roads. The area alongside the roads should be cleared and vegetation pruned up to two meters away from the outer edge of the ditches or edge of the embankment. Drainage system ditches, outlet cones, outlets, retention basins, and any constructionsbelow the road surface must be kept clean and in perfect working order in the rainy season from mid-June to mid-September.Emergency repairs could consist of restoring or rebuilding civil engineering works destroyedby exceptionallyheavy rains, for instance.

3. Institutionsand laws governingthe environmentin Chad

3.1 The Ministry of the Environmentand Water (MEW)in Chad was created in July 1997 and comprises five technical directorates:the Directorate for Forests and Protectionof the Environment, the Directorate for National Parks and Wildlife Reservations, the Hydraulics Directorate, and the Directorate for Fishing and Aquaculture.

-79 - Throughoutthe country, Forest Inspectoratesrepresent the MEW in each prefecture.

3.2 The environmental legislation currently in force essentiallyconsists of Law 014/PR/99, which establishes principlesto govern protection of the environment. This framework law defines, inter alia, the required content of environmentalimpact assessmentsand procedures for validating and applying the measures recommendedin such assessments. However, the implementingdecree covering projects subject to an environmentalimpact assessment has not yet been drawn up.

3.3 Other legal instruments dealing with the environment include the Mining Code, which establishes the general principle that environmental impacts should be kept to a minimum, and the Water Code, enacted in 1999, which contains, in particular, regulations regardingwaste disposal in waterways. Nearing completion is a Forestry Code, which, among other things, will establishby-laws for protected areas. 4. State of the Environment The natural environment 4.1 The entire RPR subprojectarea falls inside the Chadian basin formed out of sedimentary materials covered by sandy aeolian deposits with an average altitude of 300 m. The GENIS-RT subprojectarea is also partly located in this basin, although the Bitkine - Mongo section crosses the Guera crystalline rock massif, consisting of a group of isolatedgranitic inselbergs rising to a height of over 1,500 m. The soils in the subproject areas are mostly of the tropical ferruginoustype, alongwith hydromorphicsoils in the depressionsand along the banks of rivers.

4.2 The two subproject areas are located in the Sahelian strip, which has a fairly pronounced rainy season stretching from June to September, with between 350 and 400 mm of rainfall. Mean daytime minimum and maximumtemperatures range between25 degree C and 35 degree C.

4.3 The RPR subproject area has a dense river system around Lake Chad and two significant year-round waterways: the Chari and the Logone. The area is supplied with water from the extensive Chari-Baguirmi groundwatersystem, which is easily accessible,especially alongside the rivers. The GENIS-RTsubproject area, on the other hand, is characterizedby the absence of year-round water supplies. The river system, consisting of wadis, is very sparse, with the exception of a few ponds in which water can still be found in the dry season. There are scattered groundwater nappes in the Gu ra, but they are often deep and difficult to tap. The layers of alluvial groundwaternearer the surface have a slow rate of flow: the shortage of safe water is a major constraint in this region.

4.4 The subprojects are located in the Sahelian-Sudanesebioclimatic area, which is steppe covered with thomy vegetation and perennial grasses. The original plant ecosystems are subjected to enormous pressure from successivedroughts and, above all, human activity: livestockfarming, intensiveagriculture, and felling of trees for firewood. In fact, apart from residual areas of original vegetation located near wadis, the steppes covered with trees and shrubs frequently give way to grassy steppes overrun by Calotropis procera shrubs and practically devoid of ligneous vegetation. Only the N'Djamena- Guelengdeng(RPR) sectionhas some recentneem seedlings.

4.5 Wildlife in Chad has become much less abundant in recent decades. Only smaller mammals are to be found along the subproject routes, although elephants from the Zakouma Park have reportedly been seen in the rainy season near Bokoro. The protected areas inside the subproject zones are the Abou Telfan wildlife reserve, which runs alongside the Mongo - Mangalme section, Lake Fitri, 60 km north-east of Bokoro, a biosphere reserve harboring numerous species of birds, the Mandelia wildlife reserve, which runs alongside the southern branch of the RPR subproject, and the Douguia hunting reserve, which is crossed by the northem branch of the RPR subproject.

The human and socioeconomic environment

4.6 In 1999 the population of Chad was approximately 7.5 million or 5.8 inhabitantsper km2. A little under half the population(48 percent) was under 15 years of age and the population growth rate was 2.7 percent per year.

- 80 - Populationdensities in the areas covered by the subprojects are shown in the following table.

Table: Population densitiesin the prefectures on subprojectroutes

Prefectures Densit Rehabilitationof paved Performance-based y roads (RPR) Maintenance and Management lIbab./ Program km2 (GENIS-RT)

Cbari-Bagu 19.5 251 km / 88 % 65 km / 15 % irmi

Guera 6.2 345 k / 78%

Mayo-Kebi 32.3 35 km / 12 %

Batha 3.7 30km / 7%

4.7 The overall illiteracy rate in Chad is 87 percent. It is higher among women (95 percent) and in rural areas, where only 35 percent of children aged 6-15 attend school. The education system suffers from a lack of teacher training and a shortage of primary school classes. In the subproject areas, most of the major settlements along the routes have a primary school (public, communal, or religious). The basic education (CEG) and secondary schools are located in the administrativecenters of the prefectures and sub-prefectures (Bokoro, Bitkine, Mongo, Mangalme and Oum-Hadjer in the case of the MMLL subproject). N'Djamena has educational establishments at all levels, from primary to university.

4.8 The vast majority (96 percent) of dwellings in Chad have dirt floors, only 7 percent of households have access to safe water, and 89 percent of rural households lack latrines. Four types of settlement are found in the subprojectareas: * Traditional rural villages along the GENIS-RT and northern branch RPR subproject routes. * Roadside villages, resulting from the displacement and the later evolution of traditionalvillages after the road was paved. These are typically found along the southern branch of the RPR subproject (N'Djamena - Guelengdeng). * Medium-sized towns and large villages: Djermaya and Guelendeng (RPR), Bokoro, Bitkine, Mongo, Mangalme and Oum-Hadjer (GENIS-RT) * Urban and periurban settlements: on the outskirts of N'Djamena.

4.9 Political and social administration in village communities is based on traditional structures,represented by the traditional village chief, who acts on the authority of the head of the district (canton), who answers to the sub-prefect (sous-prefet)or head of the local government office (poste administratij). In rural areas, land rights are based on prior occupancy and on the soil being put to good use for plantations, farming, or construction. Land is acquired through inheritance. In theory, strangers can never settle except on rare pieces of land never used by a community. In towns, it is possible to buy land, but legal purchasing procedures are rarely completed: the legal occupants frequently lack title deeds. Furthermore, there are still numerous plots of land occupied illegally by squatters.

4.10 The infant mortality rate in Chad in 1997 was 132 deaths per 1,000 live births, and almost one in five children dies before the age of five. The main causes of infant mortality are diarrhea, fever, respiratory diseases, and malaria. In persons over five years of age, the main causes of death reported at health care centers are malaria, urogenital diseases, diarrhea, and dysentery.

4.11 By January 1999, more than 10,000 cases of AIDS had been reported in Chad. The number has been

- 81 - rising at an annual rate always exceeding 1,000 since 1993. The prefectures in the southwestern part of the country are the hardest hit. They account for 76 percent of cases. Activities to combat aids are managed at the national level by the National Program to Combat AIDS and STD (NPCA/STD). The strategy adopted in 1999 was based on a decentralized, multisectoral approach in activities designed to combat the epidemic. Thus there are STD/AIDS awareness and prevention campaigns in outlying health districts involving various sectors, including the rural developmentand education sectors, and local communities. A project to combat AIDS/STD along Chad's main roads has been prepared at the initiative of the Chadian National Drivers Union; this project will be cofinanced under PAProNaT.

4.12 In the RPR subproject area, health facilities are heavily concentrated in N'Djamena, with a few outlying health posts spread along the N'Djamena - Guelengdeng section. The paved road network facilitates access to the health centers. The GENIS-RT subproject area is much less fortunate, given its distance from the capital and the state of the road, which is currently impassable during the rainy season. Between the district hospitals of Bokoro, Mongo, and Oum-Hadjer, there are a number of more or less well-equippedhealth posts in the main villages along the road.

4.13 Although women play a very important role performing household activities and earning income (by engaging in economically important domestic, farming, herding, and socioeconomic tasks) their development is hampered by the weight of traditional inequalities (undeclared marriages, unequal inheritance rights), inadequate legislation,and the absence of a Family Law Code, as well as a lower level of formal education than that of men. Women generallyhave very little decision-makingpower.

4.14 The Sahelian zone, in which the RPR and GENIS-RT subprojects are located, is ideal for extensive rain-fed crop farming: millet, sorghum, groundnuts, etc. Irrigated truck farming (onions, tomatoes, etc.) and pricked-out sorghum farming (sorghum transplanted when water levels drop) are practiced alongside waterways (the Chari and Logone, in particular), and on the edges of pools and lakes (especially Lake Chad). Thus, at the beginning of the dry season huge expanses of pricked-out sorghum can be seen growing on the banks of the Chari, on either side of the southem part of the N'Djamena - Guelengdeng section.

4.15 The RPR subproject area is devoted mainly to sedentary or short-range migrant livestock farming, whereas in the GENIS-RT subproject area, long-range herding predominates. In this GENIS-RT area, herds frequently move alongside the road sections because the Mangalme - Oum-Hadjer route is a much-used seasonal migration corridor to central Africa and the Mangalme - Bokoro route is one of those most frequently taken to bring cattle from the eastern territories to the main markets, and particularlythe N'Djamena slaughterhouse.

4.16 With its year-round waterways and lakes, the RPR subproject zone is a favorite place for fishing, an activity that does not yet appear to have been fully exploited. In the GENIS-RT subproject area, on the contrary, the scarcity of fish has led the Waters and Forest authoritiesto ban fishing altogether.

4.17 The GENIS-RT subproject area has considerable tourism potential thanks to its impressive landscapes spotted with striking granitic elevations and the Abou Telfan reserve, which is a natural environment preserved in the heart of an imposing massif. The rivers and Lake Chad on the RPR subproject routes could also be exploited for tourist purposes despite the very variable water levels. Nevertheless, little of this potential has been developed, mainly because of security problems and the poor state of the roads.

5. Environmentalimpacts of the subprojects

5.1 As mentioned above, neither of the subprojects contemplates altering the layout of the roads to be improved, nor any destruction of dwellings, or of collective or private property. The National Transport Program does not envisage building new roads or airport runways.

5.2 During the civil engineering phase, the main negative environmental impacts will result from:

- 82 - (i) the establishmentof base camps and fixed construction site installationsthat could potentially cause damage, soil erosion and pollution, contaminationand disturbance of surface waters, induced pollution of groundwater, destruction of plants, disturbance and harm to wildlife, aesthetically undesirable alterations of the landscape, on-the- job accidents,transmission of STD/AIDS due to the interaction of personnel with the population along the route, and air pollution from the (RPR) asphalt coating unit.

(ii) the opening or re-openingof borrow pits and solid rock quarries,which could result in damage, soil erosion and pollution, contaminationand disturbanceof surface waters, inducedpollution of groundwater,destruction of plants, disturbanceand harm to wildlife, aestheticallyundesirable alterations of the landscape, and on-the-job accidents.

(iii) the establishment of mobile construction sites (preparation of the road bed, work on surfacing, road verges, ditches, drains, and civil engineering structures, which could result in damage, soil erosion and pollution, contamination and disturbance of surface waters, induced pollution of groundwater, destruction of plants, disturbanceand harm to wildlife, aesthetically undesirablealterations of the landscape, on-the-job accidents,traffic accidents,noise nuisance and dust emission (GENIS-RT),and endangeringof water resources.

The execution phase will, on the other hand, also have positive impacts on local commercial activities and job creation.

5.3 During the operationalphase, the main negative environmentalimpacts will result from:

(i) the presence of slopes that could cause disturbanceof surface waters and soil erosion throughrun-off;

(ii) the presence of abandoned borrow pits and quarries, which could have a negative aesthetic impact on the landscape; (but which are often desired by local populations as water accumulationponds)

(iii) an increase in road traffic induced by the project, possibly causing an increase in soil, surface water, and groundwater pollution, damage to plants through clearing, disturbanceof wildlife, and transmission of STD/AIDS because of increased interactionbetween travelers and the populationliving alongsidethe roads; and

(iv) increased speed of traffic, which could increase the number of traffic accidents and injuries to and trauma in the roadside population.

There will be numerous positive impacts during this operational phase. Chief among them are: a more bountiful supply of inputs and more frequent visits by development and health workers, improved health care training and schooling,and a decline in the strenuousnessof tasks carried out by women.

6. Measuresto improveimpacts

6.1 The measuresrecommended to improve impacts are listed in the tables below. They can be divided into four categories,depending on the nature of the measuresand who will implementthem:

* steps requiring public sector participation: public information campaigns and public consultations to be arranged by the borrowerMTPTHU, through the Directoratefor Roads, the technicalimplementing agency; * "sound environmentalpractices" on the part of the contractor,to be included in the bidding documents and the contracts awardedto successfulbidders in the form of technicalenvironmental clauses (cf. model in Annex 4 of the report); * technical civil engineering measures: these entail additional work to be carried out by the contractor and should therefore be added to measures contemplated in the initial invitation to bid and itemized in the price schedule; * attendant measures other than those that are traditionally incumbentupon public works contractors, such as reforestation and STD/AIDS awareness campaigns. These measures will be entrusted to competent

- 83 - subcontracted operators, using bidding procedures where appropriate. These operators will preferably be NGOs, or local associations.

7. Environmentalmanagement plan Environmental surveillance and monitoring 6.2 It will be the responsibility of the MTPTHU, acting through the technical implementing agency, to ensure that the measures are properly implemented in accordance with the environmental assessment recommendations (environmental surveillance) and to monitor actual impacts in order to verify whether the measures adopted are effective (monitoring of impacts).

6.3 For each of the subprojects, a Technical Committee for Environmental Surveillance and Monitoring (TCESM) will be established, composed of a representative from each of the following departments: the Environmental Unit of the Directorate for Roads (Chair), the Ministry of the Environment and Water (Directorate for Forests and Protection of the Environment),and the Ministry of Public Health.

6.4 This select Technical Committee will have a special obligation to conduct environmental surveillance operations. Its chief initial tasks will consist of including environmental clauses in the bidding documents (BD), including the technical civil engineering measures to be entrusted to the contractor in the BD, and preparing the bidding documents and/or procurement contracts for those subcontracted to carry out attendant measures not entrusted to the principal contractor.

6.5 The Technical Committee will elicit the support of the Accountability Mission (AM) in verifying the contractor'sobservance of sound environmental practices and the implementationof the technical civil engineering measures. Thanks to its ongoing presence in the field and contacts with the contractor, the AM will be best placed to oversee implementationof the environmentalprotection measures.

6.6 With respect to environmental monitoring, on-site gathering of impact indicators will be conducted either directly by the members of the TCESM or by specialists in given areas acting under the supervision of the Technical Committee. Questions relating to the overall assessment of impacts will be dealt with at meetings of an enlarged Technical Committee, including, in addition to the members of the select Technical Committee, representativesof the AccountabilityMission (during the civil works phase), prefectures and sub-prefectures,local communities,and NGOs operating the subproject regions or other associations.

6.7 This enlarged Technical Committee will meet at regular intervals, from the first year following completion of the works until its members consider that the environmental disruption related to implementation of the subproject has been adequately mitigated.

6.8 Both the environmental surveillance and monitoring of impacts will be based on simple and easy-to-measure indicators, known as "objectively verifiable indicators." They will be either descriptive or performance indicators.

- 84- Table: Summary of improvement measures and of operators monitoring the impacts on the natural environment of the Rehabilitation of paved roads (RPR) and Performance-based Maintenance and Managementprogram (GENIS-RT) subprojects

Impacts Measures RPR sub- GENI Responsibility project S-RT for Execution/ sub- Monitoring projec t

Destruction of (Op, EC) Redevelopmentof borrowpits after work X X Contractor/ AM soil is completed

Soil (BI, EC) Reconstitutionof agriculturalland X X Contractor/ AM subsidence

Soil erosion (Bl, EC) Selection and conversion of fixed X X Contractor/ AM installationsites X X Contractor/ AM (BI, EC) Selection and adaptation of borrow pits and quarries X X Contractor/ AM (1l, EC) Anti-erosion treatment of drains and Not justified X NGO, Assoc. / D.S. structures MEW (Op, SW) Protection of areas downstream from Not justified X hydraulicworks NGO, Assoc. / D.S. (Op, SC) Stabilizationof slopes X X MEW

(Op, SC) Redevelopmentof borrow pits after work X X Contractor/ AM is completed (Op, SC) Reforestation NGO, Assoc. l D.S. MEW

Soil pollution (BI, EC) Managementof liquid pollutantsand solid X X Contractor/ AM waste

Pollution of (BI, EC) Selection and adaptation of borrow pits X X Contractor/ AM surface water and quarries Contractor/ AM (Bl, EC) Managementof liquid pollutantsand solid X X waste

Circulation of (BI, EC) Managementof non-recycledmaterials X X Contractor/ AM surface water

Pollution of (BI, EC) Managementof liquid pollutantsand solid X X Contractor/ AM groundwater waste

Destructionof (BI, EC) Selection and conversion of fixed X X Contractor/ AM vegetation installationsites X X Contractor/ AM (BI, EC) Selection and adaptation of borrow pits and quarries X X Contractor/ AM (BI, EC) Preservation of trees on embankments emprises) X X NGO, Assoc. / D.S. (Op, SC) Reforestation X X MEW (Op, SC) Enrichingvegetation in plantedareas NGO, Assoc. / D. S. MEW

-85 - Disturbance (Bl, EC) Selection and conversion of fixed X X Contractor / AM and installation sites X X Contractor / AM destruction of (BI, EC ) Selection and adaptation of borrow pits wildlife and quarries X X Contractor / AM (Bl, EC) Sensitization of personnel to need to protect the environment X X NGO, -Assoc. (Op, SC) Reforestation X X DS-MEW (Op, SC) Enriching vegetation in planted areas NGO, Assoc. DS-MEW

Disruption of (BI, EC) Selection and conversion of fixed X X Contractor / AM landscape installation sites X X Contractor / AM (Bl, EC) Selection and adaptation of borrow pits and quarries X X NGO, Assoc. (BI, SC) Reconstitution and creation of alignments DS-MEW

Phase of the roiect: B: building of infrastructure, Op operation of infrastructure Execution orocedures: EC Technical environmental clauses, SW: Supplementary works to be carried out by the contractor, SC: Subcontracted, outsourcing (NGO, etc.) AM: accountability mission (= Engineer) - TCESM: Technical Committee for Environmental Surveillance and Monitoring DS-MEW: Decentralized Services of the Ministry of the Environment and Water - DS-MPH: Decentralized Services of the Ministry of Public Health

Table: Summary of improvement measures and of operators monitoring the impacts on the human environment of the Rehabilitation of paved roads (RPR) and Performance-based Maintenance and Management Program (GENIS-RT) subprojects

Impacts Measures RPR GENIS Responsibility for -RT Execution/ subpro- subpro Monitoring ject ject

Dust and noise (BI, EC) Limit dust emissions by watering X X Contractor / AM nuisance

Destruction of useful (BI, EC) Preservation of rows of trees X X Contractor / AM trees (Op, EC) Reconstitution and creation of X X NGO, Assoc. rows of trees DS-MEW

Integrity and traffic (BI/Op) Public participation initiatives X X TCESM, Contractor, within villages (BI, CE) Restrictions and management of X X NGO / TCESM rubble and backfill Contractor / AM

Injuries and trauma (BI, CE) Respect for work safety rules X X Contractor / AM (Bl, CE) Road signs on building sites and X X Contractor / AM traffic flow systems (BI, SW) Road signs and speed reducing X X Contractor / AM devices (Bl, SW) Installation of access rarnps for X X Contractor / AM pedestrians (BI, SW) Installation of parallel lanes X X Contractor / AM

Air pollution-related (BI, EC) Limit dust emissions by watering X X Contractor / AM illnesses (BI, EC) Enclosure of the asphalt coating X Not Contractor / AM plant justified

STD and AIDS (BI, EC) Sensitization and prevention of X X Contractor / AM STD/AIDS among the workers (BI, SC) Actions to combat STD/AIDS in X X NGO, Assoc. / DS-MPH the local population

- 86- Water removal (BlIOp)Public participation initiatives X X TCESM, Contractor, (Bl, EC) Restitution of developed water X X NGO/TCESM points X X ContractorT AM (BI, EC) Restitutionof base camps (bases X X Contractor/ AM vies) (Bl, SW) Conversion of borrow pits into water points

Destruction and (BI/Op)Public participationinitiatives X X TCESM, Contractor, degradation of farm (BI, EC) Reconstitutionof farmland X X NGO / TCESM land Contractor/ AM

Movementof herds (Bl, SW) Establishmentof parallelroutes X X ContractorI AM (Bl, SW) Provisionof cross-overpoints for Not X Contractor/ AM herds Justified

Promotion of (B!, SW) Construction of parking and X X Contractor AM commerCialactivities resting areas

Job creation (BI, EC) Local hiringpreference X X Contractor! AM

Destruction or (BI/Op) Publicparticipation initiatives X X TCESM, Contractor, degradation of NGO / TCESM culturalsites

Phaseof the proiect: Bl: buildingof infrastructure,Op: operationof infrastructure Execution orocedures EC: Technical environmentalclauses, SW: Supplementaryworks to be carried out by the contractor,SC : Subcontracted, outsourcing(NGO, etc.) AM: AccountabilityMission (= Engineer) - TCESM:Technical Committee for EnviromnentalSurveillance and Monitoring DS-MEW:Decentralized Services of the Ministryof the Environmentand Water - DS-MPHt:Decentralized Services of the Ministryof Public Health

Environmentalcosts

6.9 The costs of the technical and attendant environmental measures are listed in the table below. The cost of the environmentenhancement measures for the RPR subproject is CFAF 92,000,000, or 1.3 percent of the total cost of the project (CFAF 7,150,000,000). The cost of the environment enhancement measures for the GENIS-RT subproject is CFAF 147, 000,000, or 2.1 percent of the total cost of the project (CFAF 1,727,000,000x 4 = CFAF 6,908,000,000).

Table: Costs of the environmentalmeasures of the Rehabilitationof Paved roads (RPR) subproject

Measure Operator Unit Cost Unit Qty Total cost CFAF CFAF

Speed reducing devices with markings Contracto 100,000 / speed 20 2,000,000 r reducing device

Building of parallel lanes Contracto 300,000 / km 30 9,000,000 r

Installation of access ramps Contracto 50,000 I ramp 20 1,000,000 r

Building of rest areas (3,000 m2) Contracto 6,000,000 / area 3 18,000,00

- 87 - Conversionof borrow pits to water points Contracto 2,000,000 / adapted site 10 20,000,00 r.0

Enrichment of vegetation and NGO 500,000 / hectare 30 15,000,00 reforestation 0

Actions against AIDS/STD NGO 25,000,000 program 1 25,000,00 I ~~~~~~~~~0

Rows of trees NGO 500,000/ 2 x 100 trees 4 2,000,000

TOTAL 92,000,00 0

Table: Costs of the environmental measures of the Performance-based Maintenance and ManagementProgram (GENIS-RT)subproject

Measure Operator Unit Cost Unit Qty Total Cost CFAF CFAF

Speedreducing devices with markings Contractor 50,000 / speed reducing 20 1,000,000 device

Buildingof parallel lanes Contractor 300,000 / km 40 12,000,000

Installationof pedestrianaccess ramps Contractor 50,000 / ramp 40 2,000,000

Buildingof cross-overpoints for herds Contractor 300,000 / cross-over 40 12,000,000

Buildingof parking areas Contractor 1,000,000/ area 10 10,000,000

Ccnvesion of borrowpits to water points Contractor 2,000,000/ adapted site 20 40,000,000

Enrichmentof vegetationand reforestation NGO 500,000 / hectare 40 20,000,000

Actions againstAIDS/STD NGO 25,000,000/ program 1 25,000,000

Rowsof trees NGO 500,000 / 2 x 100trees 10 5,000,000

Stabilizationof slopes NGO 500,000/ km 30 15,000,000

Stabilizationof embankments NGO 500,000! km 10 5,000,000

TOTAL 147,000,000

-88 - MAP SECTION

20° LIlozB YA ! ARABREP 18° Thin ap - proded bIythe. ALGERIA )-- LIBYA CHA D 1--- ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~The6aundoien-Iaon,denainatioen nyethHnfIoaloownomn ,' \., -. s >--_t NATIONALTRANSPORT PLAN SUPPORTPROJECT dond TheWodd Bank Gacap, any jadgeet PROJECT an thelegal oaton aF nay teetitayar any ndarselentor cceptnceof NIGER ROAD REHABILITATION RIVERS - -SAOA AECUSSba,na-aes. ,/ CHAD /HA_,-- ROAD MAINTENANCE PILOTPROGRAM SEASONALWATERCOURSES ROAD PAVING ° SELECTEDCITIES AND TOWNS SUDAN *-u-e-- PRFETUECAITL N'Di.-en NATIONALROAD NETWORK: @ PREFECTURECAPITALS B I I N E * NI A------>ALL-SEASON ROAD NETWORK * NATIONAL CAPITAL iltine NIGERIA / _ /~CENTRAL |- - DRY-SEASON ROAD NETWORK PREFECTUREBOUNDARIES r x, / CEiNTRAL'> -- INTERNATIONAL BOUNDARIES \, IIO Am Z CAhMERCiONfJ AFRICANREPUBLIC RURAL ROADS AND ACCESS PATHS 'D-\rMEM.REP. OF CO'N r-14° 140, / \ ( \ 16° g Haroz-Dlom6o 160 Baga- ' M ,do j) A6cAhNEM 0Sola Nlu our i / Moussorosak

X <<~%s4) n.n%% t / < w

Karay IBan Lac Fitri' t _ K IL 16 b \ MOY ',HA~i~-. *0Moyto

t9>rlVyal VMa~~~ssaguet Bo o9/ - agpi

\ X lCH A R I ' 0Mlo|Gzed ~~~~N'Diam6na fw J, < 1 i o' ~~~~~~~~~~~~~~~Ar6outcoak~ d< \ ^f-_, A 12° _ l %\\aorei<>gm Bitkine cKlim

z) )> to~~~nd6lia \

z t gen Fai s< Temki ~ A

z1ass t o > t\S t ss

15Q ,. MAO !0> , ,,.,- % , J 50 100 KILOMETERSotioE H;- .5X.... 0 i~~~~~~~~~O ngor< / I _ ,H_R{ _ co _ I .A ~n , I /\ S*^\ \L r\ / 1 ,__2rw \ .,/ , / I Ul

16- 20' 24-

C H A D NATIONALROAD NETWORK: NATIONALTRANSPORT PLAN SUPPORT PROJECT = ALLSEASONROAD NETWORK 124 NATIONALROAD NETWORK, 2000-2009 RURALROADSANDACCESSPATHS

- RIVERS 7N -~ -'--- SEASONAL WATERCOURSES N 0 ~~~~~~~~~~~~~~~~~~~~~~~~~~~SELECTEDCITIESAND TOWNS -" '~~~~~~~~~~~-~~~~k,~ ~ ~ ~ ~ ~ ~ ~ ~ ~PREFECTURECAPITALS N'/'s j < sm / 6S NATIONALCAPITAL jN , . t - e _ PREFECTUREBOUNDARIES 7 Aozo\4 N,~. --- INTERNATIONALBOUNDARIES

, ~ EH N, Np/,

Zo

-20/ S N 20-

| ~ ~ ~ f ] 0 s o a- B N, 4

NG I E R ,io,-Ah N I G E R? | 'I BORKO- ENNEDI - TIBESTI

, Xrl;-L

I ""' ' Fodo

j KANEM 5ull " / t1- -§

.Mk-RS BATHA. N"

H.~~~~~~~~~~~~~~I ; Mo,o;o go,1n0 = tGorj,rm /

181 G~~~~~~~~IE RIA CGRA yHbE IG~~~~~~~~~~~~~~~~~~~~~~

b G.-~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0.,

"'YA~~~

b NE-d =L...= L arg- ALGERIA )---,

*4Ndfr. dg \>msg=

A ,, " f CENTRAL AFRIC N REPUBLI-t NIGER

/ Dl IOD 2?R 300 LbEOMEIRS SUDAN

,tC TLhksm=pnTsp-odrebd6,h.eMp,esDg;U&iL=FTh. TWodd BSok NIGERIA / 7 ' i

o =h. Ik.1d -,y, of .py ,rtd W - -,Id GA,sp.Rm- y AFRK-AN REPUBLEC 14' =mpto,,,de, r ofd,uc b,u,d,,i,. 20- '\ - bTM REPOFCGNCN